Wednesday, August 10, 2016

SPX (S&P 500) Weekly Chart Upper Band Violation Negative Divergence Developing

The SPX weekly is tagging the upper standard deviation band so the middle  band at 2101, and rising, is on the table. The red lines show universal neggie d across the indicators although in the very short term basis, the MACD line and money flow (short green lines) may want one more higher high in price. This  would manifest a couple weeks out where a jog move occurs in the price; down now, then up to current levels a week or so from now, then down with the roll over lower.

The blue box shows where the ADX identified a strong trend in price and lo and behold that was when price was selling off into early this year. Note that the ADX dropped after the current rally began back in February indicating that this whole six-month rally is NOT a strong trend. Isn't that surprising? For all the joy and euphoria you would think that the ADX would be up well above 25 and instead it is down at 9.

The expectation is for a selloff to occur on the weekly basis with lower targets at the 2127-ish gap-fill and the 2000-ish level. Watch the MACD line since price may drop for a week, but then recover to another matching high, where the MACD line will negatively diverge, and that will be the top, say a couple weeks from now, then the same downside targets are in play. 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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