Run, Don't Walk to the Nearest Exit

At least that’s what RSP, the equal weighted S&P 500 ETF, is saying. It has finally reached the top of the same channel that marked the Oct 2007 top and the Jan 2018 top. It should also reach, on the open, the 1.272 Fib extension of its drop from Feb 2020. And, it’s doing this on negative divergence with RSI having also run into overhead resistance. Granted, it’s not the S&P 500, which has pulled away from it on a number of occasions on the strength of the nifty 5-6 mega-caps. But, value has caught up with growth and things are downright frothy at the moment. I’m not sure this is what the Fed had in mind…

RSP’s channel is a stern warning that should not be ignored – especially on a day when we are reminded once again that the virus is not being dealt with effectively and unemployment is going in the wrong direction.BTW, the nearest exit…