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Weak overseas action and Monday’s lower close suggest the S&P 500 is ready to break below the prior swing support at 1056. If broken, next support is in the 1040 area and then at the major 38.2% support in the 1010 area. The NYSE A/D line is still acting much stronger than the market averages as it is still well above the support formed in June and July. Historically, the A/D line leads the market averages, so this divergence requires close watching.
Tom Aspray, professional trader and analyst, serves as video content editor for MoneyShow.com. The views expressed here are his own.
