Monday, November 18, 2013

SPX Weekly Chart Upward-Sloping Channel Overbot Rising Wedge Negative Divergence Upper Band Violation Price Extended

The bulls run price up through the blue rising channel for the last couple years. Price is at or near the top rail and the pink dots show the price extension well above the 20-week MA above the 50 MA above the 200 MA requiring a mean reversion (lower prices) just like the other pink dot tops. The red lines show negative divergence across all indicators over the multi-week and month time frame, however, the bulls keep receiving the Bernanke and Yellen juice, last week traders were intoxicated by Yellen's siren song of pleasure forever and price punches 10 handles up through the upper standard deviation band. This requires a mean reversion back to the middle band, the 20-week MA at 1701.12, and rising, at a minimum, with the lower band at 1612.26, and rising, also in play.

The bulls squeeze out further juice (short green lines for the indicators) with the Yellen happiness last week as well as the BOJ sending the yen lower. The BOJ's action on the yen is critical this week. This momo (short green lines) wants to see another matching or higher price high, after any weakness, so the RSI and MACD can more firmly roll over. Thus, the jog scenario is in play for a price move down, then back up, then roll over, say, over a 1 to 3 week or so time frame. This is consistent with the monthly chart that shows a market top likely in place any time now through the coming days or weeks. Projection is either down from here forward, or the down-up, then roll over move, over the coming days and weeks. The charts desperately want to see a substantial market correction moving forward but the Fed and global central bankers will not allow the pull back and their actions and jawboning only serve to send the stock market vertical. Many Fed speakers are on tap each day this week to pump the stock market higher and Chairman Bernanke is also speaking. The FOMC Minutes are released Wednesday; traders do not expect any mention of QE tapering until March or later. 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.

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