Sunday, December 7, 2014

SPX Daily Chart Overbot Rising Wedge Negative Divergence

Price is moving up inside the red rising wedge a bearish pattern. The red lines show negative divergence across all indicators but in the very short term the bulls are trying to create a tiny bit more upside juice. So a jog move may occur down-up-then down over the next three days rather than down right away. The MACD cross is in the bears favor so watch that closely for any change. Price is near but did not quite tag the upper standard deviation band at 2084 so that has to be respected for a couple more days.

Price may want to print inside the apex of the rising wedge for a day or so before receiving a negative divergence spank down. The expectation is for price to top out Monday or Tuesday and start lower targeting 2055-ish. The SPX has not back tested the 20-day MA at 2055 and rising (same as middle band) for 31 days a very long time so a mean reversion is needed to test this support. The bulls are strong constantly supported by the global central bankers. The chart would like to usher in market weakness as long as a central banker does not run to the microphone proclaiming more easy money. 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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