Monday, December 30, 2013

SPX Weekly Chart Overbot Rising Wedge Negative Divergence

The SPX weekly remains a key market metric moving forward for equities. The marroon lines show universal negative divergence across both the shorter-term one-month time frame as well as the multi-month time frames. The chart is content with never seeing another price high above these levels in the weekly time frame moving forward. The SPX monthly chart will receive a new print at tomorrow's EOY close so that chart can be posted later in the week. The bulls want to see another higher high on the monthly chart after a pull back occurs. Thus, the weekly chart likely wants to send price lower, perhaps for January into February, but the monthly chart will want to reexert itself to bring price higher again. Keystone is working on the 2014 predictions, and will assess the 2013 predictions over the next day or two. The monthly chart likely needs from 2 to 5 months to place the multi-year top which would be sometime in the first half of 2014.

Using the weekly chart above, the anticipation would be weak markets to start the first couple months of 2014, then a recovery in the March-May time frame where equities will likely place the multi-year top. The BOJ decision on pumping more stimulus to further destroy the yen and pump the dollar/yen pair higher, or not, in April 2014, will be an epic event, so mark it on your calendar. April 2013 was the 'shock and awe' from the BOJ. Banzai! Japan and US stock markets ran higher in 2013 due to the BOJ pumping in a tag-team approach along with the Fed, which continues. The projected initial move down in January-February may shock many at its magnitude lower, perhaps a quick 100 to 200 handles, then equally surprised at the V bottom and wild upside spike that follows, regaining the losses, then completely surprised and shocked when markets top and roll over in the March-May time frame, not to see these current highs again for a year or few in the future.

Keep watching the indicators above to see if the neggie d remains in place for the indicators, which it should. The overbot conditions and muliti-year rising wedge provides more bear candy so the move lower should begin any time forward. A drop of 100 handles or more in the SPX moving forward is projected. Watch to see if price loses the lower trend line of the rising wedge which would signal big trouble ahead. The 20-week MA at 1748 and rising provides a downside target, perhaps for January or February, to allow the negative divergence to play out. 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.

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.