S&P500 at a critical juncture - Volatility coming ?

S&P500 is hitting important resistance represented by the upper trend line that connects the previous tops in 2000 and 2007. Both these tops initiated a substantial decline in the index. Is it different this time ?

Chart courtesy of elliottwavetechnician.com Click on the chart for larger image.

SP500 is overbought and negative divergence is developing on the technical indicators. Another negative is the decline volume in this rally over the last few years.

Many traders and investors watch this resistance line and some are lightening up their portfolios as a defensive move. Others position themselves to buy the breakout beyond the resistance line. Expect a jump in volatility shortly.

Geir Solem

Elliott Wave Technician
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