Saturday, December 27, 2014

SPX Weekly Chart Overbot Negative Divergence Price Extended

The weekly chart prints a higher high on light volume. The price high comes with weaker indicators across mulitple time frames, negative divergence, as the red lines show. Note the MACD line over the last three weeks and the sneaky bulls are creating a sliver more of upside juice. The MACD line cross remains bullish as well. Thus, a jog move may occur over the next week or two, down-up-down as price peaks and drops. The alternate scenario to the jog move is simply down from here forward.

Price may honor the red rising wedge and come down to the lower rail this week then back up for a matching high to satisfy the tiny strength in the MACD line and then roll over to the downside losing the lower trend line of the wedge and collapsing in earnest. The 20-week MA support is 2005 and rising so on this weekly and more intermediate-term basis price may seek the 2002-2006 landing area.

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. This 2050-ish level is at the bottom trend line of the rising wedge pattern above. 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, at most a week or two, 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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