Tuesday, July 15, 2014

SPX Weekly Chart Overbot Rising Wedge Negative Divergence

The previous look at the weekly chart last week projected another matching or higher high in price, which is only a few points away, especially due to the VST robustness in the money flow and potentially with the MACD line. The SPX is moving higher this week rallying yesterday to begin the week on a positive note (the expected market bullishness through the full moon (Saturday) occurs as usual each month). The JPM, GS and JNJ earnings today should help continue the buoyancy. In addition, during OpEx weeks, a Tuesday low typically leads to a Wednesday high. Fed Chair Yellen testifies to Congress over the next two days starting with the Senate Banking Committee at 10 AM today with the House Financial Services committee on tap tomorrow. The stock market is typically up 80% of the time moving through the two-day semi-annual Fed Congressional testimony that occurs in February and July.

The prior two weeks show a matching high (last week printed a top with the all-time highs occurring 7/3/14 the day before the Independence Day holiday) with an initial negative divergence spank down occurring last week. The best thing for the market bears is for price to actually move higher to 1985-1990 today or tomorrow to create the higher price move in conjunction with the indicators all remaining below the maroon lines in the right margin for the indicators. This would firmly lock in the neggie d and create a solid market top.

Adding further drama, a major Bradley turn occurs tomorrow so an inflection point is expected in markets any day forward. According to the Bradley, the rally yesterday may begin a new strong thrust higher for stocks, or, price may collapse from here, perhaps after all the seasonal happiness poops out either late Wednesday or on Thursday. The Bradley turns do not predict direction only that a market inflection point is at hand. The next few days and week or so should be very interesting. Projection is for sideways to sideways lower prices moving forward for the weeks and months ahead. The SPX should top out in the coming days or week or two. The collapses from rising wedges can be quite dramatic. The move higher in the SPX is long in the tooth (the SPX is above the 200-day MA for over 85 weeks the longest rally in the last 50 years) so a collapse from these current price levels would not at all be surprising. The SPX begins trading today and prints above 1982. 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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