Friday, October 30, 2015

SPX S&P 500 2-Hour Chart Global Central Bankers Collude to Pump Stocks Higher Overbot Rising Wedge Negative Divergence

The central banker orgy beginning at SPX 1990 two weeks ago may finally be running out of gas. The maroon lines show overbot conditions, the rising wedge pattern (bearish) and negative divergence across all indicators wanting price to top out here and receive a smack down lower. The HOD is 2094. Price remains on an island above 2060. Price was only a hair away from filling the gap at 2096-ish you will see on the daily chart. The MACD line on the SPX daily chart is long and strong and wants price to come back up again after a pullback. Thus, if the 2-hour neggie d exerts itself now with a spankdown that may create weakness into the closing bell and early next week but price will come back up again probably to fill the 2096-ish gap to satisfy the MACD line on the daily. Then the daily chart may be in universal neggie d pointing to more downside ahead. If price moves down to 2060 now, then bounces again that would place an H&S pattern in play with neck line at 2060 and only needing to finish the right shoulder.

The circles show the collusion by the global central bankers. The pink circle is the WSJ article by Jon Hilsenrath that kicked off the festivities in the futures market on Wednesday evening, 10/14/15. The neon blue circle is the ECB promising to deliver more QE on 12/3/15. Then the PBOC tag-teamed with Draghi for the gold circle after China cut rates and bank lending restrictions. Then the fourth circle the FOMC meeting this week. At first, traders thought the Fed was a touch hawkish but quickly realized the Fed will not raise rates on 12/16/15 only a few days after Draghi eases on 12/3/15. More ECB QE will send the euro lower and US dollar higher and a Fed hike will create a higher dollar. Emerging markets will be wiped out with the higher dollar. Anyway, for now, the four central banker pumps send the SPX from 1990 to 2094; over 100 handles in 10 trading days; +5.2%. What power the central bankers hold! Rejoice in their majesty! Kneel and worship at the feet of the modern-day money-changers guarding the Temple! It is shameful.

Note how the 2-hour chart sets up with neggie d and price begins to receive its expected spankdown only for the central bankers to intervene to keep stocks elevated. Each time the easy money juice diminishes, the neggie d kicks in again, but then another central banker starts printing money to save the day. Rinse and repeat. The BOJ rate decision was this morning and they were the ones expected to ease a couple weeks ago instead the coordinated collusion described above occurred and the BOJ stands pat. They are all in cahoots. BOJ has got big problems since there is nothing left for the bank to buy; it will have to start buying very risky assets and you know that will have an ugly ending. The central bankers are sick; they believe they have no other choice except to keep printing money.

The fun continues. These are historic and epic times for economics and world markets. You will look back years from now and realize this point in time, 2015 into 2016, was a major inflection point for world markets. The SPX should venture lower due to the neggie d in this 2-hour time frame, say for a couple days or so, then likely recover again into the mid to upper 2090's next week. A closer look at charts can occur on the weekend. 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 5:44 PM EST: The negative divergence begins a spankdown sending price from the 2094 intraday top to 2079 at the closing bell. The weakness should persist unless, yes, you guessed it, unless a central bank decides to do more pumping.

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