Monday, August 31, 2015

SPX S&P 500 2-Hour Chart

The market drama continues with S&P futures down -15 to begin the week. Futures are 10 handles off the overnight lows. The green lines show where we were fishing for the bottom last week, which occurred with the positive divergence. Price leaps higher and during the final hour of trading on Friday prints matching and higher highs than 4 and 5 candlesticks ago. With the new price high, the stochastics are overbot and in negative divergence. The RSI is neggie d, ditto the histogram and money flow although they are only slightly below the highs a few candlesticks ago. This set up will create a spank down hence the negative futures.

The MACD line is long and strong wanting to see another higher high after any pullback. So 2 or 3 candlesticks (4 to 6 hours say between lunchtime and the closing bell) may need to print before uniform negative divergence prints to guarantee a move lower. If price comes back up to satisfy the long and strong MACD line, say going into lunchtime, and the RSI starts poking higher, then stocks have room to run on the upside. Once neggie d occurs for all the indicators price will receive a firm slap down so focus on the MACD line to see if it rolls over for the bears or if it continues higher forcing the RSI higher sending stocks higher.

The strongest S/R is 2040, 2032, 2019, 2011, 2002, 1998, 1993, 1985-1988, 1978, 1973, 1964-1965, 1951 and 1942. It appears that the SPX may tease around the 1978 and 1973 levels after the opening bell deciding to bounce or die. 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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