SPX: Strong Momentum, but Are Risks Building?

Hello traders ??, today we focus on the momentum of the SPX

                                                          MOMENTUM        

TOP PANEL: S&P 500 & Volatility Stops

BOTTOM PANEL: MACD-v & Volatility Valuation Index

VIEW CHART FULL SIZE: https://www.tradingview.com/x/ULlYQWDD/

Section 1: Strong Momentum of Daily Chart

The SPX daily chart presents an interesting contrast between momentum and volatility

—two indicators that often don’t move in sync.

Let’s break it down using our "Chart Checklist":

• Trend: Stage 1 (Short-term and long-term trends are both up)
• Momentum: Range 3 (Rallying, with MACD-v > 100 and hitting new highs)
• Volatility: Range 1 (Complacency)

While momentum is undeniably strong, (MACD-v > 100 AND making new momentum highs)

volatility is signaling something different.

As highlighted yesterday, the Volatility Valuation Index (VVI) suggests subtle complacency

creeping into the market.

This divergence raises a question: can the market sustain such strong momentum, or is it setting up for a reversal / retracement ?

Perhaps the answer lies outside of the daily chart...

Section 2: Too Strong Momentum of Monthly Chart

Zooming out to the monthly chart,

the MACD-v (12,26) shows momentum in the "Risk Range" (>150).

Historically, this level correlates with corrections,

ranging from minor pullbacks to full-blown bear markets.

This signal doesn’t appear often,

but when it does, it’s worth paying attention to.

Still, no indicator should be used in isolation—

it’s all about combining factors like trend, momentum, and volatility, breadth, sentiment, etc

for a clearer picture.

Section 3: Tommorrow

we will examine the S&P 500 and breadth indicators ... stay tuned...

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