Tuesday, July 16, 2013

SPX 2-Hour Chart Bull Flag Rising Wedge Overbot Negative Divergence Inverted H&S Gravestone Doji

The hourly and minute charts continue to set up for a pull back but the Fed pumping keeps creating subtle low-volume market buoyancy. The red rising wedge, overbot conditions and negative divergence say a spank down is at hand. Yesterday's last candlestick is an inverted hammer (upside down hanging man), a gravestone doji, so a trend change is anticipated but today would need to show the follow through to the downside to confirm the turn signal. We watched the pink bull flag last week and that pattern was fulfilled at 1670-ish. The red dots show an extended moving average ribbon, indicative of a price that is topping, with the SPX above the 20 MA above the 50 MA above the 200 MA.

The brown lines show an inverted head and shoulders (H&S) pattern in play with head at 1565 and neck line at 1655 targeting 1745. Considering the importance of this development, a back test of the critical neck line at 1655 is needed where price can decide if it does want to head higher, or not. The inverted H&S pattern would be negated with a drop under 1655. For now, the negative divergence should create market weakness with potential downside targets at the support levels at 1677, 1672, 1669, 1666 and 1652. If/when price back kisses the neck line at 1655, both bulls and bears alike will have to make a major decision since price will either bounce from 1655 signaling the all-clear for 1700+, or, collapse. First thing is first, so see if the negative divergence smack down occurs and if so, how low price wants to move. If the VIX stays under 14.20, the bears got nothing and the SPX will recover in quick order to the upside. If VIX moves above 14.20, the upside rally is over and bears will growl. 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.

1 comment:

  1. Through anticipation of one last grand finale burst of Inflationism in front of Summer Earnings Season, the twenty most inflationary ETFs rose strongly to new rally highs; these being, BPOP, KRE, IBB, FDN, CARZ, PBS, IGV, RZG, RZV, PSCI, RXI, PBD, IYC, PPA, RWW, IAI, SPHB ,SMH, XRT, and PJP, seen in this Finviz Screener ... http://tinyurl.com/m4rrz95 ... of note, most all of these turned lower on Tuesday July 16, 2013. Could it be that these constitute a tremendous short selling opportunity?

    An inquiring mind asks, did an Elliott Wave 3 Down commence in the S&P 500, $SPX, SPY on Tuesday July 16, 2013? Did Risk-On, ONN, turn to Risk Off, OFF, with Volatility, TVIX, VIXY, VIXM, and XVZ, rising, as seen in their ongoing Yahoo Finance Chart? http://tinyurl.com/l6dmzck


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