SPX 30-Minute Chart Overbot Negative Divergence Channel Megaphone

Each time the 8 MA crossed under the 34 MA indicating bearishness ahead, the bulls popped it with the green arrows. That signifies the buy the dips crowd. The low volume, low volatility melt-up continues, each pull back is bot buy long players but short sellers are not in the game. The index floats up as long as a bigger fool is willing to buy. Once the buyers disappear nothing will be holding the index up.

The chart is overbot and negatively diverged as shown by the red lines. Note the megapone pattern shown in red shouting "I need to see a ride to 1295." The blue upward-sloping channel shows price bumping up against the top rail, another reason for a pull back. The negative divergence is not a strong divergence, however, it justifies a pull back but the MACD histogram, for example, is very flat from price high to price high. This hints that a pull back is needed but do not rule out another move to the top rails of the megaphone and channel, where more drastic negative divergence should appear and confirm the coming roll over.

The chart shows that if you did not enjoy the long run up on the bull side this is not the time to jump in. Price moves above 1333 and higher will negate this analysis. Projection is sideways to sideways down moving forward targeting the 1290's to satisfy the megaphone pattern. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.