SPX Daily Chart Upwards-Sloping Channel Overbot Rising Wedge Negative Dvergence

Things were looking good for the bears this time yesterday but that went up in a puff of smoke when David Tepper of Appaloosa Management  appeared on television sounding bullish trumpets and telling everyone to run into the stock market on the long side full steam ahead. Price tags the top rail of the channel at 1650-ish. The RSI squeezes out a higher high (now overbot) compared to one week ago creating some near-term long and strong momo, ditto the MACD line. Volume perks up with the short-covering thrust higher.

Overall, the chart remains negatively diverged and overbot, with the rising wedge remaining in place, so down is the expected direction moving forward.  The RSI and MACD line near-term oomph should create a day or three, maybe one week, of stutter step sideways moves to allow these two indicators to set up with negative divergence over the couple week time frame. As soon as the RSI and MACD set up with negatively, the door to the downside will be opened for perhaps the much-awaited Godot market correction to finally appear.

The SPX is now elevated at almost 180 points above the 200-day MA and a reversion to this moving average would be anticipated moving forward. A reversion to the 200 MA would be an -11% drop that no one expects to happen. Projection is for sideways to sideways lower for the weeks ahead. SPX key support is 1645, 1634-1636, 1626, 1618, 1614 and 1597-1598. 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.