The Signal Before the Spike | Katie Stockton on What the Charts Tell Us About What Comes Next
TL;DR
Technical analyst Katie Stockton identifies a new monthly MACD sell signal on the S&P 500 suggesting a prolonged choppy phase ahead, while noting crude oil's February MACD buy signal anticipated the current breakout to $109, indicating a cyclical shift to sustained higher prices rather than a temporary spike.
📉 S&P 500 Momentum Deterioration 4 insights
Monthly MACD Sell Signal Triggered
The S&P 500 generated a monthly MACD sell signal at the end of March, confirming a shift from weak intermediate-term momentum to a more concerning long-term cyclical deterioration.
Critical Support Zone Identified
Key technical support lies between 6130-6175 based on Fibonacci retracement levels, with a breakdown potentially opening the door to 5900 or lower levels.
Breadth Deterioration Patterns
Only 44-45% of stocks currently trade above their 200-day moving averages compared to below 20% during the April 2025 washout low, indicating less capitulation this cycle.
Slow Grind Warning
The current gradual decline contrasts with last year's swift correction and historically signals more prolonged, problematic market conditions than sharp V-shaped recoveries.
🛢️ Oil's Technical Breakout 4 insights
Pre-Conflict Bullish Signal
WTI crude oil's monthly MACD generated a buy signal in February before Middle East tensions escalated, forecasting the cyclical reversal above the $68 threshold.
New Cyclical Uptrend
With prices surging from $68 to approximately $109, technical indicators suggest the beginning of a sustained cycle of higher highs and higher lows rather than a temporary geopolitical spike.
Early Reversal Signals
Stochastic oscillators and DeMark indicators had already shown downside exhaustion in crude oil before the conflict, confirming the February MACD shift as a genuine trend change.
Sustainability Metrics
While sharp moves often prove countertrend, the convergence of cloud model support, MACD confirmation, and breakout sustainability indicates a major turning point for energy prices.
🔍 Technical Methodology 4 insights
Measurable Extremes
Overbought and oversold conditions derive from specific indicators like the stochastic oscillator, where readings below 20% indicate oversold conditions and above 80% indicate overbought states.
Timeframe Criticality
Daily chart oversold signals typically last days to three weeks while weekly signals extend weeks to three months, requiring investors to align expectations with the specific technical horizon.
Noise Reduction
Technical indicators help filter headline-driven volatility by distinguishing between meaningless market reactions and genuine structural breakouts or breakdowns.
Support Discovery Protocol
Rather than mechanically buying at support levels, Stockton advises waiting for momentum upticks and indicator confirmation to validate that genuine buying interest exists at those prices.
Bottom Line
Wait for confirmed momentum upticks and technical indicator improvement rather than buying at specific price levels, as the S&P 500 enters a prolonged choppy phase while crude oil begins a new cyclical uptrend.
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