Friday, February 13, 2015

SPX 2-Hour Chart All-Time Record High Overbot Rising Wedge Negative Divergence Developing Upper Band Violation

The SPX prints a new all-time record high at 2094.74 and the day is far from over. Price breaks up and out of the brown sideways channel. The tight standard deviation bands squeeze out the rally move higher (pink arrows). Price is moving up inside a rising wedge pattern which is bearish. The indicators are overbot which is bearish sans the MACD line. The MACD wants one more high in price in this 2-hour candlestick time frame after a slight pull back. So the SPX should top out in one to three candlesticks which is 2 to 6 hours; that would place equities at topping out anytime now through early Tuesday morning. Markets are closed on Monday in Observance of President's Day holiday. Considering it is 11:40 AM EST as this is typed, the bears may be able to start the downside before today's closing bell. Simply watch to see when the MACD rolls over. Typically, stocks trade bullishly in front of a three-day holiday weekend.

The upper pink band is violated so a move back to the middle band, now at 2068 and rising, is in play. The bears were crushed by the Ukraine ceasefire agreement and Greece happy talk. So charts have to reset from the good news thrust higher which they are. Greece is expected to receive a new bailout package on Monday and this is getting priced into stocks already. The projection is for the SPX to soften for an hour or two, then come up for another new all-time high today, then the MACD will print negative divergence and the top will be in either, say, in the last hour of trading today or early Tuesday morning, and stocks should roll over to the downside.
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 12:25 PM: A new candlestick begins and with price at equal highs the MACD line is only a single hair from turning over. The near-term top may be approaching quickly and occur this afternoon. The SPX 1-hour chart is universally negatively diverged with its indicators including the MACD.

Note Added 3:17 PM:  The SPX moves down for a couple hours, then comes back up to satisfy the MACD positivity described above and prints at the high, a hair away, and the SPX 1-hour chart is clearly negatively diverged across all indicators. Ditto the 2-hour chart above, however, that pesky MACD may be pointing a tiny smidge higher still yet. Thus, the near-term top is anytime now through two more candlesticks, so now through early Tuesday morning. These current high prints with equities have a good chance of being the highs for the near-term top and stocks will roll over to the downside. If not, stocks will roll over anytime within the next four trading hours. There is about 40 minute of trading remaining today. SPX is at 2094 and just did print a new all-time high at 2094.93. The 1-hour chart wants the SPX to simply head lower from here forward.

Note Added 6:35 PM: The bulls keep markets elevated into the closing bell with the SPX printing a new all-time intraday high at 2097.03 and new all-time closing high at 2096.99. The SPX 1-hour and 30-minute charts are set up with universal negative divergence so they want a top to be in now and for price to head lower.  Ditto the SPX 2-hour chart above except the pesky MACD line. The MACD continues to slope positively, by a hair, but this says price needs to come back up for one more high after a pull back. So two candlesticks are likely needed, a down up pattern, so the guess would be a top at 2097-2102 on Tuesday morning then stocks sell off and move lower. Of course, a positive or negative news event will impact markets. The Greece bailout coming on Monday should be priced in to stocks for the most part. The BPSPX prints above 70 giving the bulls a double whammy buy signal a big feather for their cap. UTIL drops to 593 under the closing print from 15 weeks ago which now places utilities in a weekly downtrend which is a bad omen for the stock market going forward. Volatility collapses creating bull fuel and VIX drops to 14.69 at the critical 200-day MA at 14.62 which is a bull versus bear market signal. Therefore, the VIX pivot off the 200-day MA on Tuesday morning will dictate the market story. If VIX moves higher at the opening bell, stocks will sell off. If the VIX drops at the opening bell on Tuesday morning, stocks will rally and SPX is headed above 2100.

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