Wednesday, January 15, 2014

SPX 2-Hour Chart Overbot Negative Divergence Developing

The bulls enjoy a 2-day upside market orgy courtesy of the BOJ. Banzai! The dollar/yen was under 103 one day ago and now well above 104. The BOJ keeps slapping the yen lower to send the dollar/yen and stock markets higher. The last three candlesticks show an up down up price move. The indicators are a mixed bag, the short red lines are negatively diverged, the short green lines are long and strong wanting to see another price high. Over the 3-week period there is negative divergence across all indicators. Therefore, the bulls have a bit more juice, the RSI is also not yet overbot, it does not have to be, but in general there is likely a need for from 2 to 4 candlesticks to create the top and roll over. Thus, from 2 to 8 hours time which encompasses the Thursday session into Friday morning. Housing Starts are released before the bell on Friday and Consumer Sentiment is 9:55 AM so the chart may set up to where these two key data points create the pivot.

Bulls may try and keep things elevated all day long tomorrow, the MACD line, money flow, and perhaps RSI will no doubt help for a short time to begin the session, however, the expectation is for price to peak and roll over to the downside either tomorrow or Friday morning. 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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