Tuesday, November 29, 2016

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

Keystone has been posting the 2-hour chart over the last week watching for the potential market top. The three-week Trump Rally has lots of momentum. On the bear side the low put/call ratios and high NYMO indicate a near-term top at hand. Investors are hooked on government spending and Keynesian money printing so Trump's promise of large infrastructure spending creates joy in the stock market.

The red rising wedge, overbot conditions and universal neggie d across all indicators signal a top and the SPX is spanked lower for four candlesticks, which is 6 to 8 hours of trading time. The indicators are weak and bleak but the RSI and stochastics have not yet crossed into bear territory under the 50% levels. The expectation is for lower lows in price ahead in this 2-hour time frame. The 2205 and 2194 support/resistance levels are in play. The Trump optimism keeps refueling the upside momentum but as the chart above indicates, price needs a rest. If price moves higher, and the S&P futures are up +4 two hours before Tuesday morning's opening bell, there is no reason for the SPX to seek the 2213 highs since negative divergence has printed for all indicators. 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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