Thursday, February 13, 2014

SPX 2-Hour Chart Overbot Negative Divergence

We have been watching the 2-hour chart waiting for the roll over but that has been like waiting for Godot the last couple days. The game-changer was the debt ceiling limit resolution by Congress which created the bull fuel and upside orgy through the strong 1808-1810 resistance and sent price to the high 1820's. The SPX moves about 15 to 20 handles higher on the debt ceiling limit increase which is a somewhat typical move for the happy news.The debt ceiling limit resolution can now be checked off the bull catalyst list.

The chart now sets up with overbot conditions and negative divergence across all indicators (red lines). This should create the spank down and sideways to sideways lower move going forward. However, the market has more moves and gyrations than Beyonce, so if a positive news surprise occurs, or if the Fed and BOJ keep pumping, they may try to reverse the technicals above, but it would not be expected at this time. The bears should now receive a turn at bat. Watch the MACD line since a slight move higher there would help send price to 1832 but the expectation would be that would create firm neggie d and spank down albeit from a few handles higher. The dollar/yen is 102.22. VIX 14.05. If the chart plays out with the neggie d, the expectation would be for the dollar/yen to move back down towards 102 and the VIX to move above 14.15. Support below is 1828, 1824 and 1818. This information is or 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.

Note Added 4:22 PM:  Dollar/yen 102.20. VIX 14.14 one single penny on the bull side of the 14.15 bull-bear line identified by Keybot the Quant algo. SPX finishes at 1829.83. The sneaky MACD line has a hair of a positive slope to it as mentioned above, so price may move to the 1832 resistance tomorrow and the expectation would be that the MACD line then creates negative divergence. Will have to watch it after the opening bell tomorrow. The expectation remains that the SPX should roll over to the downside going forward.

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