Sunday, October 18, 2015

SPX S&P 500 Daily Chart W Pattern Bottom Gaps Negative Divergence Developing

The bulls rally last week on more central banker easy money talk. Price came up to fill the 2033 gap. There are gaps at 2077-2080 and 2096-2097. The W pattern bottom (purple) is a powerful force and a W has the most strength the farthest it is under the under 50 and 200-day MA's so the bulls have a feather in their caps. If the W bottom trend line is 1880 and upper at 1990, that is 110 handles, then the upside target is 2100 which is the upper gap.

The other day, Keystone posted the daily and another higher high in price was predicted due to the long and strong MACD line and it occurs. However, now the money flow is long and strong, RSI is trying to sneak higher and the MACD line remains long and strong; all bullish. Charts are adjusting after the happy central banker talk last week that created the rally spike. Price may need a day or three, one to three candlesticks, to roll the MACD line over into neggie d to confirm the near-term top. 

So the neggie d on the histogram and stochastics should spank price lower but then price will come back up. At that time say Tuesday or Wednesday, perhaps the indicators will all be neggie d and create a spankdown and weakness ahead. The CPCE and CPC put/call ratios are dropping and coming into the complacency range where a near term stock market top would be expected. The CBOE Skew prints an uber high signaling a very significant top at hand.

The 2038-2061 range is an uber strong resistance gauntlet. Market bears remain in business under 2038. A bloody fight occurs between 2038 and 2061. Bulls win big above 2061 and the road to 2080 then 2100 will quickly follow. Bears need to push price under strong 2032 support then under 2019 to begin an acceleration lower. 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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