The Weekly MACD is still below its signal line. The Williams %R (30) and the Aroon Oscillator are both reading “overbought”.

The Index price is clearly at the lower end of an important resistance area (about 4950-5250) and at the 50% retracement level of the bear market. A break above that area concurrent with a move by the MACD above its signal line would be bullish. Further consolidation in the near future seems probable. A break below the 4500 area would be bearish.

This week, the Daily MACD is above the Zero line and above its signal line. The MACD Histogram is falling (the market is losing momentum). The Aroon Oscillator and Williams %R (30) are both above their over-bought lines and have turned down.

Given the over-bought momentum readings on both the Weekly and Daily Charts, a retracement is highly likely. This may just be a test of the mid-October high, but more likely a test of the early-December high.

Cheers

Red