Tuesday, February 25, 2014

SPX 2-Hour Chart Rising Wedge Overbot Negative Divergence

The 2-hour chart is a mixed bag like the daily chart with very odd price behavior. The tight pink ovals show the band squeezes downward in early February and upward yesterday morning. It is odd to see yesterday's up move only last for two candles, about 4 hours trading time, then pierce the upper band and then reverse down. The neon green line shows the all-time closing high at 1848.38 which was pierced after the opening bell, with price remaining above all day long, only to close under as the bell rang not printing a new all-time closing high. The prior 1851 all-time intraday high was taken out and is now 1858.71 so the 1859 level is key overhead resistance. Price should move to the middle band, at a minimum, (since the upper band was violated) now at 1841.41 and rising. Note that price has not tapped the lower standard deviation band for one month and that is moving flat at 1827. The apex area of the red rising wedge keeps the door open to 1858-1870.

The red lines show the rising wedge, overbot conditions and negative divergence all in play and wanting to see lower prices ahead. The stochastics are hinting at one more run higher but overall the stoch's are overbot and wanting to see lower prices as the hours play out. So it may take one to three candlesticks for price to roll over which would be the bulk of Tuesday's trading day. The money flow is simply heading lower and wants nothing to do with a higher SPX. Projection is sideways to sideways lower. Watch the red rising wedge; once price collapses from the lower red rail, the drop may be quite dramatic. 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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