SPX 30-Minute Chart Potential H&S Overbot Negative Divergence

Keystone's fave chart to monitor the SPX, the 30-minute chart with 8 MA and 34 MA's. Each candle represents 30 mintues of incremental time, so each day is comprised of 13 candles since the trading day is 6 1/2 hours. Yesterday's action shows the big opening sell off, then bounce. Note how the 8 MA was headed lower to stab down thru the 34 MA which is bearish, but before that could happen the markets were goosed higher after the open. Thus, keep watching for the 8 MA and 34 MA cross moving forward. Also watch the RSI 50% level where above is bullish and below is bearish.

The red lines show the negative divergence we watched a couple days ago which resulted in the Friday slap down. The pink lines show that negative divergence remains in place as higher highs occur in price, so nothing has changed, the chart indicates that a move down is in order. The price dropped under the 8 MA which is always a first step for the bears. The ADX shows a stong uptrend in place mid month (over 25) leading to higher highs but look at the paltry 14 number now, indicating that the uptrend has pooped out.

Lastly, watch the blue lines which show potential H&S patterns in play. If the currentl levels serve as the head, say 1370 (or use today's close if the bulls run a bit higher), the neckline at 1354 targets 1338. The thin blue line at 1358 may serve as a neck line as well which would target 1346. SPX 1341-1344 from mid-month is strong support so price will likely test those levels moving forward.

The bulls are the Energizer Bunny moving higher each day but the rally is very long in the tooth as this analysis shows. Projection is a move down for the SPX with an intial move to 1358-1362, the thin blue support line, since this is the price level of the large volume candle from a few days ago. 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 financial decision.