Tuesday, November 29, 2016

SPX S&P 500 Weekly Chart; Overbot; Rising Wedges; Negative Divergence

It is interesting to look at the SPX weekly chart considering the wild upside Trump Rally orgy over the last three weeks. The chart is not impressed at all. While the daily and hourly charts are dealing with the parabolic spikes in pricing, the weekly chart motors along, yawning, unimpressed by all the euphoria. Of course the three white candlesticks show the jump since 11/7/16, however, the new all-time price highs come with negative divergence across all indicators. In this weekly time frame, there is little oomph to take stocks higher.

For the August market top, you see the neggie d with stoch's and the histogram that created the spankdown but the RSI, MACD and money flow indicators were long and strong wanting to see a higher high in the SPX in this weekly basis in the future. Those new highs occur over the last couple weeks and come with all the indicators now neggie d. The stochastics are overbot. The red lines show rising wedge patterns in play which are bearish.

The large volume candlestick three weeks ago occurs during and after the Trump election win. For such a large price and volume move, it would be prudent for the SPX to come back to test the 2100-2160 range to see how volume reacts at that level.

So the previous 2-hour SPX chart wants to see some further weakness in the VST. The daily SPX chart is agreeable to a day or three or so of weakness but would like to see price come up to test the highs again. The weekly chart is agreeable to some buoyancy for a few days or week or two but overall is set up for the downside. The MACD positive cross is a feather in the bull's cap so keep an eye on that. If the MACD cross turns negative that should get the ball rolling downhill on the weekly basis. If the MACD cross remains positive, the bulls are going to try and maintain buoyancy in the stock market. 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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