By Licia Leslie
July 27, 2025
Hi Shoppers,
Nice rally this week.
The charts are all looking bullish and healthy to continue higher from here.
There is one little thing nagging me.
The MACD is being stubborn, it has yet to turn bullish.
What is the MACD?
The Moving Average Convergence/Divergence is a momentum oscillator that tracks a stock’s trend.
It is made up of two lines and a histogram
- MACD line which is the difference between the 26 period exponential moving average less the 12 period EMA
- The signal line which is the 9 period exponential moving average
- Histogram with a zero line
What are you looking for?
Watch for the MACD line to move above or below the signal line
Blue line is MACD
Red line is signal line
Above = bullish Below = bearish
Also, a move above/below the histogram zero line
Above = bullish Below = bearish
Here is an example of how it looks with the stock chart:
Look for Divergence
A divergence signal happens when the MACD isn’t moving with the stock:
In this case it is a bearish divergence.
The stock is moving higher but may not have the strength behind it as the MACD is moving lower.
And sure enough the stock sells off.
As with all technical analysis trading tools you do not want to trade on MACD only but use it as evidence to make your case on your directional opinion.
I am seeing MACD Divergence in the S&P 500
Here we are rallying and making new highs every day in the S&P 500 Emini Futures:
While the Relative Strength Index has been following along moving higher the MACD is wallowing.
The MACD or Moving Average Convergence Divergence has been relatively flat.
It did turn bullish from June 25th -July 11th but then it crossed over bearish as the futures were consolidating.
Then the futures broke out on July 17th and have traded over a hundred bucks higher but MACD is still in the red or bearish.
It is beginning to curl up or bullish and on the SPY chart has just turned green on Friday but keep your eye on this indicator.
All systems look bullish and it would help if the MACD could participate.
Thank You For Reading … See You Next Tuesday,
Licia Leslie
P.S. If you aren’t trading 0DTE options you are missing out on all the fun.
Licia Leslie
Head of Technical Analysis
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