Friday, February 27, 2015

SPX 2-Hour Chart

The SPX 2-hour chart motors along after the negative divergence smack down (red lines and red arrow). The rising wedge patterns and overbot conditions also created the downside move. The bears do not have much gusto, however, as bulls keep copper elevated and volatility low to prevent any downside traction. The SPX 30-minute chart shows a sideways dance currently. The indicators above show the MACD line with a negative cross and weak and bleak profile (the slope of the line is down). The stochastics and ROC are also weak and bleak over the last few hours. The RSI and histogram are flattening in concert with the sideways action shown on the 30-minute chart.

The weak and bleak indicators show that a lower low for price is likely after a bounce for a candlestick or two. So the expectation would be for price to move sideways to sideways lower until the indicators positively diverge. The stoch's are under 50% in bear territory. Watch the RSI to see if it goes sub 50% into bear territory since that will forecast further downside ahead for price. The longer that the RSI stays above 50% the more likely that bulls will take the stock market higher. 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 4:35 PM: The SPX drops to 2104.49 at the closing bell a lower low. With t he lower low in price the indicators are all weak and bleak (sloping lower) and the RSI is down to 48% in bear territory. The weak and bleak  indicators want lower lows in price after any bounce occurs in this 2-hour candlestick time frame. Bears should be able to keep price weak for a few candlesticks which would take markets into Monday afternoon or Tuesday morning. Note how, as previously mentioned, February finished the month weak because the month was strongly up; you typically see this behavior after a very strong month. Also, February typically finishes weak, which it did. The monthly charts receive new prints today. A quick look at the SPX monthly shows the universal negative divergence remaining in place which predicts trouble ahead and would be in agreement with a multi-year top at hand. The Dow monthly chart is also the same set up with negative divergence, overbot conditions and a rising wedge. Ditto the RUT (Russell 2000). Ditto the Nasdaq, however, the pesky bulls are tough, and the MACD line squeezes out a slightly higher high. This may extend the top in the COMPQ for an additional one to three months. So those charts say down in March perhaps into April, then back up again in Apriil/May with the SPX, Dow and RUT not printing higher highs, but the Nasdaq will come back up to current price levels or more, then all four indexes should roll over for perhaps a muliti-year trend downwards beginning. Thus, a multi-year top may occur anytime now through May.

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.