Sunday, June 29, 2014

SPX Weekly Chart Overbot Rising Wedge Negative Divergence Upper Band Violation

The money flow was being watched last week since the green line was long and strong in the shorter-term (over the last month) wanting to see another price high. Interestingly, the SPX price high occurs last week and the money flow is dead flat (short red line), hence, negative divergence. The money flow is no longer wishy-washy; it is ready to send price lower. Watching the indicators set up with neggie d, however, is sometimes like herding kittens. The minute that one indicator lines up in all time frames with neggie d, another decides to stray away and turn positive to continue the ongoing buoyant trend.

The MACD line in the very short term is the only long and strong indication on the entire chart (short green line). All other indicators across all time frames, a month, a few months and even over one year's time, are negatively diverged. Thus, price needs a smack down, and after the slap down, price may want to come up one more time for a matching or higher price high (due to the MACD line not yet negatively diverging over the short one month or so period) and then an extended down path should begin for equities, starting with a potentially dramatic collapse from the rising red wedge. So the projection would be a down week, then up week that tops out, then down from there forward, or alternately, markets simply continuing lower from current levels with the MACD rolling over without incident giving up the ghost without a fight.

Watch the MACD lines since the negative cross will tell you that the bears have taken control, or not. Since the upper standard deviation band was violated at 1966, a move back to the middle band, the 20-week MA at 1882.88, is now on the table. The projection is for sideways to sideways lower prices going forward for the weeks and months ahead with a potentially sharp dramatic drop occurring from the rising wedge at any time. We are so close you can taste it. You already have prepared exiting long positions that you are not willing to hold for several years and building your large current cash position. The month of July should be entertaining. 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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