Tuesday, July 8, 2014

SPX Weekly Chart Rising Wedge Overbot Negative Divergence Devleoping Upper Band Violation Price Extended

The SPX weekly chart had already wanted to see a move higher in price due to the ongoing long and strong MACD line and now the RSI squeezes out another near-term high last week as well. The RSI and MACD line are markers that a move back up to the highs is likely desired as time moves forward. The question is if this market pull back remains minor into next week with price returning to the highs in quick order. If so, the RSI, MACD line and money flow would be expected to negatively diverge and create a solid market top. The other scenario is the market selling continues in July and then price will venture back up in August, or September, to satisfy the RSI, MACD line and money flow in the near-term.

Price is at the upper standard deviation band (pink) so a move back to the middle band at 1897 and rising is targeted at a minimum. A price move to the lower band at 1813 and rising is also on the table. Price is extended above the moving averages so a mean reversion will occur (lower prices). The projection is sideways to sideways lower moving forward. Either the SPX continues selling off to print far lower numbers in the days ahead and during July, or, the current selling will subside with price recovering next week or the week after placing a firm and solid top then pointing to the far lower prices directly ahead. 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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