Wednesday, April 6, 2016

SPX S&P 500 Daily Chart Rising Wedge Overbot Negative Divergence

The daily is set up with negative divergence across all the indicators. The two candlesticks that form the top 3 and 4 days ago, however, are flat across the top rather than the second being a higher price, so the bulls may be sneaky and bring price up to this level or higher one more time at 2075-ish. If this occurs, which is perhaps unlikely, it will only delay the top a couple days. The SPX has not back tested the 20-day MA at 2040 and rising since late February. Price needs to desperately back kiss this level at a minimum. The 20-day is also the middle standard deviation band.

The rising wedge pattern is ominous since the collapses from rising wedges can be quite dramatic. The pink box for the ADX shows that the downtrend to begin the year was strong but this current huge sharp rally is not a strong uptrend. The ADX in fact curls lower to 22. if the uptrend was strong, the ADX would be at 30 right now.

There was a gap left behind one day ago and the strong rally action today filled that gap. Bears should be glad this was taken care of since everything remains sealed-up up above. There are no open gaps above so from a gap-fill perspective, there is no reason for the SPX to go higher above 2067. The volume today is lighter than yesterday's selling volume as price played in the exact same range; the sellers won.

The forecast is down from here. If the SPX comes up further to that 2075-ish, it will likely come with neggie d across all the indicators (check this if it occurs), and if so, then price will receive the start of a spankdown on Friday or Monday instead of tomorrow. The chart is very bearish but the central bankers are powerful. If Yellen hitches up her skirt, then stocks will rocket higher since the central bankers are the market. The SPX weekly chart indicators remain long and strong so the daily chart should spank price down in the near term but the SPX should recover back to current levels say later this month. 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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