SPX, QQQ Flash Overbought as VIX Rises

SmartReversals
04-21

$S&P 500(.SPX)$

Overbought McClellan Oscillator +70 following a market bounce signals a short-term consolidation before the bullish continuation resumes.

When the overbought condition is reached in a mature uptrend, it can precede a major pullback.

The current case is a market bounce $Invesco QQQ(QQQ)$

The RSI has crossed 70 for the first time in 6 months. This initial move typically does not mark the top, it usually precedes consolidations before reaching higher highs.

A +7.9% spike in the $Cboe Volatility Index(VIX)$ and indecisive price action reinforce the thesis for a gap fill at 7,051.

$ServiceNow(NOW)$ Consolidation is normal after last week's +16% run. Reclaiming the 20DMA with conviction could reignite momentum ($98.7).

Bullish conditions above $93.4 only, targeting $102 this week. Gap fill and go?

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