Sunday, November 24, 2013

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

The bulls keep finding a way to defeat the bears although it is easy with Uncle Ben (Fed) and Cousin Kuroda (BOJ) placing their thumbs on the stock market scale. Price moves up through the skinny upward-sloping channel and is now at the top rail. The purple and red rising wedges show price working its way up to the inside of the apex of the wedges as well. The pink dots show the price extension in play that needs to reverse as it always does. The upper standard deviation band is violated which creates a need for price to move back to the middle band, which is also the 20-week MA at 1710, and the lower band at 1616, and rising, is also in play.

The indicators are overbot and the red lines show universal negative divergence across all indicators in the multi-month time frame. The pesky bulls, however, receive that easy money crack cocaine and booze from the central bankers and create near term momo with the short green lines. This action reflects the continued pumping of biotech, healthcare and dividend stocks. The short-term momo may create a jog move, down-up-down, over the next 1 to 3 weeks, then all the indicators in all time frames should be negatively diverged for a more substantive spank down. The SPX is up 7 consecutive weeks. Projection is either down from here, or, a sideways jog move for a couple weeks then roll over to the downside. Potential downside target in this time frame is 1722-ish. 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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