Monday, December 1, 2014

SPX Daily Chart Expansion 'Megaphone' Pattern Overbot Negative Divergence

The daily chart was posted at the end of last week so scroll back for further study. The red expansion pattern remains in play spreading outwards like a megaphone. Price pierced the top trend line and will need to back kiss. The maroon lines show negative divergence along with overbot conditions so a down move is on tap. S&P futures are -9. It would not be surprising to see the SPX take a breather for the days ahead, however, note that the MACD and RSI negative divergence is not entirely convincing. Thus, the door is open to a jog move, down-up-down, over the next three days before it tops out. That jog move will confirm the RSI and MACD neggie d.

The negative MACD cross will confirm the downside, or lack thereof, so monitor that closely (purple circle). The expectation is for a pull back for the days ahead. Reference the SPX Support, Resistance (S/R), Moving Averages and Other Important Levels for Trading the Week of 12/1/14 missive posted on the weekend. Key resistance above is 2070-2071, the all-time closing high at 2073 and all-time high at 2076. Key support is 2067, 2065, 2057 and 2052. 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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