Tuesday, April 19, 2016

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

The market bulls are giving the bears the business this week roughing them up in the corner of the pool hall. The RSI and MACD line were trying to create more long and strong juice on the last SPX 2-hour chart and the RSI prints a higher high now in overbot territory. The short term spurt in the RSI and MACD line creates the further buoyancy in stock prices. The bulls appear unstoppable and with the central bankers on tap, ECB on Thursday morning and Fed next Wednesday, traders are not worried or concerned. Everything appears as blue skies and rainbows while sipping Fed wine and smoking ECB crack.

A new candlestick begins at 10 AM EST so that is an important item to jot down. Now you know that the new 2-hour candlesticks will begin printing at noon, 2 PM EST and then 9:30 AM EST tomorrow morning at the opening bell.

The RSI spurt higher occurs but interestingly, note the new candlestick. It is at the same price or higher but the RSI is flatish (this can change over the next 2 hours). This already hints at a roll over again. The MACD line is long and strong in the very short term, however, so that wants price to print one more matching or higher high with another future candlestick. Thus, the market top is likely 2 to 4 hours away.

Price tags the upper standard deviation band so the middle band at 2082 is in play. The expectation remains that stocks should top out perhaps today. If price performs a jog move down-up-down (to satisfy the long and strong RSI and MACD juice in the VST), that would peak stocks out at say between 2 PM and 4 PM this afternoon. The expectation remains for stocks to top out at anytime probably today. Price is at the top trendline of the upward-sloping channel a logical place for a pull back.

Price broke up through the 2093-2094 resistance so 2099 is next (reference the previous SPX S/R missive for support and resistance levels; scroll back or type "SPX Support" into the search box to bring the article up) and price pierces up through this strong resistance. The next resistance levels above are 2102-2103, 2110, 2114 and 2121-2123. One of these levels are logical for the top. The HOD is above 2102 at the 2102-2103 level so this may hold as the top. If price pokes up through 2103, then 2110 is a logical candidate as the top. The MACD line and RSI above will tell you when the top is in as soon as they print lower lows as price continues to print matching or higher highs. 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 10:26 AM EST: The bulls thrust the SPX up to a HOD at 2104.05 trying to poke through the strong 2102-2103 resistance but retreats in a few minutes time. The RSI slopes briefly higher in that tiny two candlestick time period but is now flat again like the chart above. The MACD line remains long and strong in the VST so the jog move prognostication remains in play. Stocks may soften say from now to 1 PM, then recover again to current levels say into the 1 PM to 3 PM time period, where, if the MACD line has neggie d in the short term, that would be the top. It will be interesting to see how it works out today.

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