Wednesday, August 10, 2016

SPX (S&P 500) 2-Hour Chart

The BOE decision last Thursday and Jobs Report on Friday create market joy. Price stumbles sideways after pricing in the latest information. That drop out of the tight standard deviation lines is very timid, a much larger drop would have been expected, but that is when the BOE stepped in to save the day. Price tagged the upper band so a move back to the middle band was likely, and occurs at 2177. The SPX will now venture either to the upper band at 2191 or the lower band at 2163.

The red lines for the indicators show the rampant negative divergence across the last few days, across the last month, and across the period to where August began. The neggie d spanked price down to begin August but then the BOE rode in on the white horse to save the day. Note that the indicators were weak and bleak wanting lower lows last week but the power of the central banks created a rally instead. The exception to the neggie d is the two green lines for RSI and MACD in the very short term. Price printed the higher high but the RSI and MACD had a sliver more of strength to bring price up one more time. We will find this out tomorrow. Even if price comes up it will likely print neggie d across all indicators when it comes up to that top red trend line and then roll over.

Price may seek the lower trend line of the expansion, or megaphone pattern in that 2140-2150 area. The stoch's and money flow are weak and bleak in the short term wanting lower lows in price after any bounce occurs. The expectation would be for a move lower, and if price does recover higher again, that high will likely serve as the top and then price will roll over in this hourly time frame. 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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