Saturday, December 27, 2014

SPX Daily Chart Price Extended Above Moving Average Ribbon Overbot Negative Divergence

The bulls are partying like its 1999 as they stroll into 2015. A new all-time high prints at 2092.70 and new all-time closing high at 2088.77. Traders sip eggnog spiked with Fed booze buying blocks of dividend stocks without any fear or worry. Despite the bullish euphoria, the overbot conditions (stochastics) and negative divergence (red lines) want to see a spank down in price. Ditto the pink dots that show price extended above the moving average ribbon; the SPX is above the 20-day MA above the 50-day above the 100 above the 150 above the 200 so a mean reversion is needed.

The MACD lines produce a positive cross which emboldens the bulls despite the negative chart set-up. The RSI has near-term upside juice so a jog move is likely where price will drop for a day or two, then recover for a day or two, then that will be the top where price rolls over (with the RSI and MACD line rolling over). If the RSI continues higher than that will continue to stretch the SPX out sideways to sideways higher. Note the low volume on Wednesday (Chiristmas Eve) and on Friday (the day after Christmas) the lowest volume of the year.

The strongest S/R in this 100-point range is 2093, 2089, 2075-2076, 2067, 2061, 2040, 2032 and 2002-2003. The 20-day MA is 2051.58 and rising and needs back tested. The SPX began December at 2067 so there may be price excitement on tap at this level as the year closes out. The projection is a near-term top now or in the direct days ahead and a move down to 2032-2067. 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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