Wednesday, July 2, 2014

SPX 2-Hour Chart Rising Wedge Overbot Negative Divergence Upper Band Violation

The 2-hour chart is setting up for the bears the red lines clearly showing ongoing negative divergence. For the last two candlesticks, however, price did not make a new high, so there is no divergence as yet over this few-hour period. The long and strong MACD line likely wants one more price high so there may be drama on tap today as the SPX teases yesterday's highs and the Dow teases 17K. As long as the indicators stay under the maroon lines in the right margin when price prints a new high, negative divergence will lock in and that will be the top.

The expectation is for lower prices moving forward although price may need one to three candlesticks to top out which is 2 to 6 hours. With the all-important Monthly Jobs Report on tap at 8:30 AM EST tomorrow morning, today may simply be a sideways drama day that ends flat or lower to set the stage for the big show in the morning. The jobs number will send markets violently one way or the other. The upper band violation places the middle band in play at 1960. The chart above favors the bears moving forward but as always a significant news event, such as the jobs report tomorrow, can greatly affect markets. Fed Chair Yellen speaks at 11 AM so markets may stutter step before lunch time. 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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