SPX Daily Chart Upper Bollinger Band Violation Negative Divergence

The SPX has performed a 100% retracement from the September top down to the mid-November bottom and back up to the top again.  The top trend line of the megaphone pattern highlighted from yesterday gave way as price jumped thru 1445-ish. Using the prior two intraday tops in the Fall, price sits at another upper trend line now (green line).  The red lines show negative divergence across all indicators and across both the two-week time frame and the four month time frame. The four-month time frame is technical not negatively diverged since price needs about three points more to match or exceed the September closing high. Considering the momo, price may want to explore the red circle before the negative divergence knocks it lower.

The upper BB was violated yesterday and to a strong extent. The upper BB is 1453 and price closed at 1462 about nine points thru. This forecasts a move back to the middle BB at 1425-ish in the coming days. The volume move yesterday, ending above the recent daily average, fell short of both prior large volume days in early December. Thus, as price moves up, the bullish volume interest fades.  The volume is also well below the thrust higher at this price level in mid-September. For a robust rally into 2013, more volume participation would have been expected for this two-day bullish orgy.  Price may have to settle in the red circle area a couple days due to the overwhelming momo, but the negative divergence should send price lower again.  Watch the RSI to see if it moves above its level from two weeks ago, or not. 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.