Sunday, August 31, 2014

SPX Weekly Chart Overbot Rising Wedges Negative Divergence Fractals Price Extended

The SPX weekly chart is negatively diverged across all indicators and would be fully agreeable to rolling over right now and trending lower for weeks and months ahead. One fly in the bear ointment would be a positive cross for the MACD lines. The prior fractals for the MACD are shown in the blue boxes. This area is where price topped out in th eprior blue boxes. The caveat would be if the MACD positive cross occurs then the top will likely print at 2010-2030.

The large volume weekly candlestick at the end of July as price was plummeting should be retested so a move into the 1900-1970 area would be prudent to see if volume appears for the bulls, or not. Price is back testing the trend lines from the rising wedge patterns. The daily chart is topping out but may play around for a few more days first so this behavior would be in sync with the weekly chart topping out now or in the week or two ahead. Price is extended above the moving averages requiring another mean reversion (pink dots). Note the pink dots are consistent with the fractal boxes and would project a top anytime between now and a week or two.

So the projection is for the SPX to roll over for lower prices for weeks and months to come, however, if the positive MACD line cross occurs, the SPX should stay elevated at 2010-2030 for a couple extra weeks then roll over for lower prices for weeks and months to come. 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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