Friday, November 22, 2013

SPX Daily Chart Upward-Sloping Channel Rising Wedge Negative Divergence Upper Band Violations

The price action is uber bullish these days. Traders, pundits, talking heads and media personalities may wax worry about bubbles but it is all faux worry. The buying volume is outpacing the selling volume over the last week. The upper standard deviation band was strongly violated but price has yet to even show respect to the middle band, the 20-day MA at 1773.07. The put/call ratios remain very low and the CPCE prints 0.48 yesterday verifying rampant complacency in markets and signaling a significant market top at hand. No one believes that the markets can ever go down since the Fed is the sugar daddy, er, Yellen will now be the sugar momma. There is 100% faith in the ongoing Fed stock market pumping and the possibility that an event would occur where everyone realizes the Fed has no further ammo is not considered or ever even mentioned, or even thought possible. Party on, Garth.

Price continues up through the blue channel actually throwing over to the top side. The tiny red circle shows how price came down to back kiss the upper rail of the channel, also the bottom rail of the red rising wedge, and bounced, to create yesterdays bullish joy. It is impressive to see the bulls hold that lower red trend line. The red lines show negative divergence across the board wanting to see a spank down in this daily time frame. Money flow is trying to squeeze out some further upside juice. The upper band is 1800-1801 so actually, the price action would be ideal for bears to see a price print higher violating the upper band again at 1800-1803, then retreat lower collapsing from the rising wedge.

The SPX is moving through the 1780-1800 range the last few days. Projection is for price to top out, perhaps today, at 1796-1805, which should set things up for a move lower to 1775-1780. Price should reenter the blue channel and then move lower. The Fed is powerful but the bears appear in position to create some downside juice moving forward. The upper neon blue trend line would allow a price move to 1808-1814 but at this time is unlikely. 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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