Friday, November 20, 2015

SPX S&P 500 2-Hour Chart Negative Divergence Developing

The stock market rally continues. ECB President Draghi speaks this morning promising more QE easy money on 12/2/15 only one week away. Price makes new highs but the histogram, stochastics and money flow are negatively diverging. Stoch's are overbot. The RSI is flat over the last price move over the last 10 hours of trading time (5 candlesticks) and the MACD line is long and strong wanting to see another price high after any pullback.

Thus, the histogram, stoch's and money flow should create a pullback but higher prices are expected due to the positive RSI and MACD line. Stocks will not top until the MACD line rolls over with neggie d and this may take another 2 to 5 candlesticks which takes trading into Monday (4 to 10 hours).

The VIX falls under the 200-day MA at 16.29 stabbing the bears in the heart. The lower volatility and loss of the 200-day creates today's equity rally. Market bears need the VIX above 16.29 or they got nothing. Bulls have their feet up on the desk smoking fat cigars toasting the central bankers.

As this is typed shortly after the opening bell, the SPX jumps to 2095. The 2091-2093 is very strong price resistance and the SPX took a few minutes to chomp through but jumps higher once the resistance fails. The 2091-2093 is now support. The next strong resistance levels are 2099, 2100, 2102-2103, 2110 and 2118-2119. To match the chart above, price may top out at the 2099-2103 resistance gauntlet either this afternoon or on Monday. Watch VIX 16.29. 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 10:04 AM:  VIX 16.16. SPX 2093.50.

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