SPX Daily Chart Upward-Sloping Channels Overbot Negative Divergence

The daily chart shows the tight vertical channel in play since the bottom in mid-June. Up like a rocket due to Fed pumping the QE talk. Price moved back up into the larger upward-sloping channel that is in play for the last few months and continues to try and hang on above the lower trend line. The red lines show overbot stochastics and money flow and negative divergence. There is near-term momo over the last few days as shown with money flow, RSI and stochastics so there may need to be some sideways to sideways up float for a day or three to burn off this momo and firmly set the indicators with negative divergence in the near term as well as in the 2 and 3-month time frames.

The 20 MA is moving above the 50 MA which is a big win for bulls that have turned the tables on the bears once again. The purple lines highlight the 1636-1649 zone mentioned in the SPX S/R missive this morning. It would be prudent for price to test this area moving forward. If you extend the upper trend lines for both the larger channel and recent tigher channel, they intersect at 1730-1740. The RSI is not yet overbot but basically there and with stochastics already wanting to see a pull back, the upside appears limited. But, Chairman Bernanke can show up on television and cough and it sounds like he said more QE and equities would likely jump higher, so all you can do is take things hour to hour. Projection would be a topping out in here this week and roll over to the downside. 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.