Monday, February 24, 2014

SPX Monthly Chart Upward-Sloping Channel Overbot Rising Wedge Negative Divergence Fibonacci Retracements

February ends on Friday so the monthly charts will receive new prints. The MACD line refuses to die maintaining a slightly positive slope. This may flatten and turn negative this week if price drops significantly. The other indicators are negatively diverged and the negative divergence from the 2007 top to now has been previously highlighted with the monthly chart. The bump up in the RSI had a lot of juice and is instrumental in sending the SPX back up to test the all-time highs, last week up to 1848 before failing, and today already testing near these highs again. The red upward-sloping channel is in play with price in the center. The brown rising wedge reinforces the overbot conditions and negative divergence all wanting to see weaker stocks moving forward.

The 10 and 12-month MA's are very important and would signal significant trouble ahead. The last trouble was in 2011. The low this year at 1740-ish teased the 10-month MA at 1727 which would have ushered in much more market selling but the bulls saved the day. The pink line is the 1783 level where February began. The bears need a drop of about 50 handles in the next 5 days to print a negative month. Two consecutive down months have not been printed since 2011. The Fibonacci retracements are shown for the move off the 666 bottom to 1851 top and show that the first 32% Fib is at 1400 which would be shocking for most market participants let alone the lower Fib's.

The MACD line wants to see the higher price print moving forward over the next couple months but overall, the chart is topping out and should roll over for the weeks and months forward. Volume continues to trail lower. Projection would be sideways to sideways lower for the months forward. Price is testing the 1851 all-time high as this is typed. A move up through 1851 likely leads to 1860-1880. 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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