Wednesday, March 5, 2014

SPX 2-Hour Chart Expansion Pattern Price Extended

Interestingly, an expansion pattern is in place in the very short term time frame in addition to the daily time frame. Price is now at the top trend line of the expansion, or megaphone, pattern. The lower rail targets 1820-1830. Price is extended above the 20 MA above the 50 MA above the 200 MA so a mean reversion back down to the 20 MA, at a minimum, now at 1855-1860, would be projected moving forward (blue dots).

The daily chart highlights the 1874-1890 zone as a key overhead resistance area. Bears have to make a stand during the days ahead and hold this ceiling, otherwise, 1920's are coming. The red lines show the negative divergence remaining over the last month for all indicators. In the near term, few hour time frame, however, the money flow, RSI and MACD line are long and strong wanting to see another higher price high before setting up for the downside. The RSI is not overbot so bulls will try to continue the push higher. The expectation is for price to top out in this area and roll over but it may take from 1 to 4 candlesticks to play out which would take the trading through today into tomorrow. If you take away the Ukraine upside orgy yesterday, the case can be made for price simply staggering sideways through 1828-1860 for 3 weeks. 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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