Getting Granular – Equities Currently Testing the Veracity of Their Recent Up-trend

By veracity we mean truth.

The chart below highlights the SPY on a 60 minute basis over the past year.

Note the level of the RSI at (1).

With this week’s selling it sits at a level that is typically associated with bottoms in strong, healthy bull trends, as region (A) highlights.

In contrast, toppy/corrective bear trends are associated with RSIs that bottom at noticeably lower levels, as regions (B) and (C) highlight.

If a bull trend is in place, the market likely needs to find some solid footing in the near-term.