Wednesday, January 18, 2017

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

The SPX weekly chart is bear friendly. The red rising wedge is in play (very bearish). The collapses from rising wedges can be quite dramatic. The red lines show the negative divergence in play that creates the spankdown over the last week or two but the MACD line is long and strong wanting another high. This hints that price will come back up to say, the 2280-2285 for a look but at that time the MACD line will likely roll over with neggie d and send the index lower. The other path forward is for price to simply continue lower from here.

The upper band was violated so the middle band at 2192 and rising is on the table. The ADX line is low at 15.54. During the long one-year rally, the uptrend was never confirmed to be a strong uptrend by the ADX. The wild card for market bulls is the RSI may want to see overbot territory. But setting that aside, the chart is firmly bearish and should fall out of bed at anytime in this weekly time frame. Bears must make sure the MACD line rolls over and does not exceed the top from August so keep a close eye on that.

The SPX should sell off going forward in the weekly time frame due to the overbot stoch's, rising wedge and neggie d. A target perhaps a month or so out would be that 2200-2220 area. The ECB rate decision is tomorrow morning so that will impact the euro, US dollar and European and US stocks. 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.

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.