Sunday, April 3, 2016

SPX Monthly Chart Rising Wedge Tight Standard Deviation Band Squeeze

The tight standard deviation bands on the SPX monthly chart will get your attention. They are squeezing in tight and are about to create a huge point move on a monthly basis. Tight band squeezes do not dictate direction only large magnitude. It is hard to believe that a massive upside spike would occur in the stock market but the central bankers are powerful and anything can happen.

However, the market bears have been waiting a long time for the stock market to roll over in a meaningful way and that may be coming starting later this month or May. The ominous multi-year rising wedge pattern on the monthly chart has not yet extracted its pound of flesh. The collapses from rising wedges are typically very dramatic and damaging. Markets topped in October 2007 and one year later the crash began in October 2008. Markets topped in May 2015 and it is nearly one year later.

April showers bring May flower but if the rising wedge plays out using the tight standard deviation bands as a catalyst, late April and early May thunderstorms will drown any hope of May flowers. We will watch how the charts develop in coming days and weeks. There may be an epic market event beginning soon. 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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