Monday, June 23, 2014

SPX 2-Hour Chart Upward-Sloping Channel Rising Wedges Overbot Negative Divergence

This will be interesting to watch today since we have been monitoring the chart since the last half of last week. Price is moving up through the upward-sloping channel. Negative divergence is in place for the 2-hour time frame for both over the last couple weeks as well as the VST, sans the MACD line that remains long and strong (short green line). The bulls keep finding ways to squeeze out more upside juice. Thus, market softness is expected from the overall neggie d but price will likely want to come back up again for another matching or higher high so the MACD can negatively diverge and confirm that the neggie d spank down is at hand. (The SPX is ready to roll over as soon as the MACD line rolls over).

Thus, the projection is a move down for a few handles then a recovery to the current highs over the next one to three candlesticks, which is today (2 to 6 hours), then a more sustained path lower should develop with neggie d spanking price lower probably targeting the lower rail of the channel. The two-week rising red wedge in play where price is at the apex of the wedge ready to drop. Of more interest is the red wedge that runs off the right side of the chart (two red lines running off the right margin). If you scroll back to study the SPX daily and weekly charts, they appear to be topping, the daily likely wants to see weakness early this week, but there appears one more move back to the current highs desired for the indicators to all roll over with negative divergence creating sustainable downside. Marrying the daily and weekly charts with the red rising wedge running off the page above targets a potential market top next week at the 1960-1968 level. So equity action will be very interesting to finish the month of June and begin July. June began at 1923.57. The July 4th holiday is only nine trading days away and is on a Friday this year.

Due to the uber complacency as evidenced by the VIX, CPC, CPCE and lofty markets shown by SPXA150R, and the SPX daily and weekly charts setting up negatively, a substantial market top is anticipated over the coming days between now and early July. The 2-hour above says equities will top today, probably late morning, and roll over to the downside but will likely recover again (due to the weekly chart) to place a firmer top a few days from now perhaps next week. As always, the technical analysis can change quickly, especially if Fed Chair Yellen appears on the floor of the NYSE shaking her pom-poms. 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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