Monday, February 24, 2014

SPX Weekly Chart Upward-Sloping Channel Rising Wedge Overbot Negative Divergence

The weekly chart continues to show a weak profile despite the new highs. The MACD line was flat going into this year with all other indicators negatively diverged so price was slapped down but that subtle remaining juice in the MACD was enough to bring price higher again. With the new highs today note the maroon lines in the right margin that should all remain negatively diverged. The short green lines, however, show the near-term momo the bulls developed except for the money flow. This provides the bulls some additional sideways juice to keep price elevated for a week or three but the anticipation is that all the indicators will remain negatively diverged and create another smack down like January. Price failed out of the red rising wedge and is now higher testing the apex of the wedge.

The standard deviation bands, not shown, are coming inwards with the top band at 1868 so that would serve as an upside target, 1868-1870. The downside target would be the upward-sloping 20-week MA at 1805 and the lower channel rail at 1800, call it 1800-1810. Projection is sideways to sideways lower for the weeks ahead. Price may remain at elevated levels into mid-March but the sideways to sideways lower intermediate term move for the weeks and months ahead can begin at anytime. Pay attention to the MACD line crosses (small red and green circles). The SPX prints new all-time intraday highs today nearly at 1859. 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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