Tuesday, May 31, 2016

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

The 2-hour chart was posted at the end of last week before the holiday. A top is expected due to the negative divergence that is printing right now and remains in flux (tiny red lines). The MACD line kept moving higher by a hair, long and strong, so price keeps coming up for a matching or higher high. The tiny red lines say all systems go for downside but let a couple more hours play out to note the price action and response in indicators. The overbot RSI and stochastics, red rising wedge pattern, and neggie d are all agreeable to a move lower.

The projection is that a near-term top is in place now at 2103.48, or, price may make one more poke to 2102-2104 over the next hour or two and roll over. Price is cooked now if the neggie d remains in place across all indicators as shown in the chart above. The only thing that would save the day is a positive news event or more central banker pumping. It is not known on what half or whole hour a new 2-hour candlestick will begin printing. 10:30 AM EST just passed and the same candle is in play so maybe it is at 11 AM. When the new candlestick begins you will know what time the 2-hour intervals are running from and to.

Price violated the upper standard deviation band so a move back to the middle band, at a minimum, at 2084 and rising, is on the table and also the lower band at 2056 and rising. If you have nice gains on a long play that you are not married to for the very long term (years and years), it may be prudent to jump ship and take profits. A near-term short play is attractive. Keystone bot some RWM. Watch to see if the MACD line rolls over and if a negative cross occurs (black line down through red line). The monthly charts receive new prints today for EOM today. May should finish positiveThis 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 12:08 PM EST: Stocks drift lower with SPX at 2094. A new 2-hour candlestick is printing starting at 12 noon so the next 2-hour candlesticks will begin at 2 PM, then 9:30 AM tomorrow morning then 11:30 AM tomorrow and so forth. The negative cross occurs on the MACD line for the 2-hour chart pointing to bearishness ahead. Looks like stocks should trail lower receiving the spankdown from the negative divergence, however, if Fed Chair Yellen grabs a microphone and coughs, and it sounds like she said "stimulus" or "rate hike delay" the bulls will be back in business. At 2 PM, you can check to see if the indicators are sloping lower with price moving lower.

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