Thursday, September 18, 2014

SPX 2-Hour Chart New All-Time Record High Sideways Channels Expansion Pattern Negative Divergence Developing

The SPX runs higher this week fueled by the FedChina stimulus, the BABA hype and the Scotland vote that appears to be maintaining the UK union. The SPX prints a new all-time high never seen before in history at 2011.79.

The neon blue expansion pattern is in play with the upper rail targeting 2020-2030 but the current status of the chart indicators are not enthusiastic for this level. The red lines show universal negative divergence across all indicators for the last month. The very near term RSI, histogram and stochastics are in negative divergence but the RSI can easily poke above the high from three candlesticks ago and also has not yet printed in overbot territory. The MACD line and money flow are long and strong in the VST so a higher high is desired after any pull back. Thus, 1 to 4 candlesticks are likely required to create the neggie d in the very short term (2 to 8 hours trading time; today or tomorrow) which will create the near term top.

Key S/R is 2011, 2007, 2005, 2002-2003, 1998, 1991, 1988, 1985-1986 and 1973. Price is currently favoring the sideways channel through 1985-2011. The expectation would be for the SPX to top out in the current 2010-2015 area and roll over to the downside either this afternoon or tomorrow. If price overtakes the all-time high at 2011.79 extra upside juice will help the bulls.

Bring up the SPX daily chart and study the tight standard deviation bands previously mentioned. The SPX is exactly at the upper band at 2011 so this is the last chance for bears. Either price has to reverse hard today or tomorrow, otherwise, the SPX is going to likely target 2050. The trading action is very important today and tomorrow. The firm result of the Scotland vote should be known around midnight or 1 AM EST. The BABA IPO prices this evening and begins trading tomorrow. OpEx Quadruple Witching occurs tomorrow so volume will be very high at the market open and at the close. 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.

Note Added 10:03 PM:  The bulls are running for another day with the SPX printing new all-time highs. The futures are higher this evening after China adds more stimulus hours ago. So the bears are smacked in the face again today and perhaps tomorrow. The RSI is up a touch higher and the MACD line and money flow are long and strong so price will want to make another higher high after any pull back so the chart still needs 1 to 4 candlesticks to roll over, about 2 to 8 hours, which is tomorrow or Monday. The 1-hour and 30-minute charts are already agreeable to rolling over.

Note Added 10:15 AM EST on Friday, 9/19/14: The stock market pops higher on the China stimulus and Scotland no vote. The SPX hits 2018 the top rail of the expansion pattern highlighted above.

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