Sunday, March 20, 2016

SPX S&P 500 2-Hour Chart Overbot Rising Wedge Negative Divergence Upper Band Violation

Here is the SPX 2-hour chart that has been interesting to watch as the ECB and Fed pumped the stock market higher over the last 7 trading days. The central bankers are the market. The table is set, however, for a bear meal. Price tags the upper standard deviation band so a move back to the middle band at 2026 is on the table at a minimum as well as the lower band at 1997. The red rising wedge pattern is bearish. Ditto the overbot RSI and stochastics. The indicators are negatively diverged over the one-month and very near-term so it is all systems go for the bears for a spankdown.

In addition, at the end of Friday trading (scroll back to look at the charts), Keystone highlighted the uber low CPC and CPCE put/calls signaling market complacency and a near-term top to print at anytime; Friday may have been the top at 2052-ish.

Note the flat RSI and MACD line over the last three candlesticks. The only fly in the ointment for bears would be if either the RSI or MACD pokes higher by a smidge, if so, the top would be delayed by one or two candlesticks (2 to 4 hours) but all the same analysis would remain in play.

The central bankers pumped so they should be quiet and let the technicals take over which should result in about a 30 to 100 handle drop in the SPX in the coming days or week or two. After that, the SPX should recover back to current levels in April since the weekly chart indicators remain long and strong. This week should be exciting due to the uber low put/calls. Keystone is holding index shorts so he will either be a hero or a zero this week. Keybot the Quant remains long but the algo is not designed to pick exact tops and bottoms. What do you think will happen? 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 Monday Evening: The bulls keep finding a way to float markets higher with the SPX ending the session at 2052. Nothing has changed. The 2-hour above remains in full neggie d; blow on it and it will likely fall over and crumble. The only thing that would save the day is the central bankers or other positive news event. Interestingly, stocks are usually bullish through the full moon each month and as fate would have it, the full moon peaks in about five hours at 1:23 AM EST. The beat goes on.

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