SPX Daily Chart Rising Wedges

Two powerful rising wedges remain in play for price. The collapses from rising wedges can be quite dramatic. A few days ago the negative divergence was developing and the wait was for the top to be placed, which it was, as shown by the red lines creating the spank down. Sometimes in the VST, the indicators will try to squeeze out additional bullishness before a firm roll over occurs but for the price spike high shown by the long red candlestick (intraday reversal), occurs with every indicator lower (negative divergence). Thus price does not have any reason to go higher now and there are no overhead gaps that need filled either. Note how price used the lower rail of the maroon wedge as support, then bounced, and then yesterday drops under the trend line only to recover by the closing bell to perch exactly on the maroon trend line. Bounce or die.

The 20-day MA at 1944.56 needed back kissed for several days and price fell for a quick test yesterday but if you got up for a cup of coffee you missed it. The 20-day should be shown a little more respect. The SPX needs to revert lower as the lofty price moves above the moving averages show (purple dots). A feather in the bears cap is the negative MACD cross (red circle). Watch this closely since it will immediately tell you who is winning the game. The bulls need to reverse the MACD cross as soon as possible while the bears want to send the MACD lower under the prior low as soon as possible. The histogram is under zero in the bear camp. Money flow and the histogram is weak and bleak hinting that further price lows are on tap.

The high print a couple days ago has a good chance to hold as a potential multi-year top. As previous charts such as CPCE, CPC, VIX, and the elevated SPXA150R, and other factors have shown, the markets may be placing a very significant top currently. This entire analysis would jive together to create the, say, 100-handle or more SPX spank down. The SPX weekly chart may be a very short term bear spoiler, however, since the money flow is long and strong in the very short term hinting that on a weekly basis, price may want to come up for one more time for THE top. This would manifest as a few days of weakness, then a recovery placing the multi-year top near the all-time highs, over the next couple weeks. This scenario may play out since next Friday is happy July 4th celebrations and markets will likely be bullish from Wednesday on. Markets are closed next Friday. New money may flow into markets for the new half, quarter and month as well creating market lift.

Thus, the projection is that the top may be in currently and some further weakness is anticipated for the days ahead. Equities may recover to print a top the week of 7/7/14, or trickling into 7/14 or 7/15, but considering the negativity forecasted at any time by the SKEW and other items mentioned above, markets are very close to a significant top and may have already printed the top. Today and Monday will tell a lot. Equities should either continue selling off and moving lower which will be a significant pull back of 80 to 150-handles, or, equities sell off for a few days but recover to the all-time highs one more time over the next couple weeks placing a firm market top and then the 80 to 150-handle SPX selloff to the downside begins. Pay attention to the June starting number at 1923.57 to see if another positive month prints come Monday evening (EOM; EOQ2; EOH1), or not. 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.