Monday, February 13, 2017

SPX S&P 500 2-Hour Chart; Ascending Triangle; Negative Divergence Developing; Overbot

The S&P 500 2-hour chart was posted a couple times last week so we may as well keep watching its progress. The double peaks from late January and early February were highlighted a few days ago and the red lines, even though sloping lower for the indicators were not negative divergence since price did not make a new high in early January. Thus, the door was open for further upside and price catapults higher up and out of an ascending triangle pattern. The bulls have lots of momentum; there is no longer any bears left on Wall Street.

The ascending triangle has a vertical side at 35 to 40 points so the breakout from 2300 targets 2335-2340. The daily chart has some more upside juice available after a pull back in the daily time frame. Remember on Friday the thinking was for a top to print today. The indicators are negatively diverged except for the long and strong MACD line, and the RSI that has some strength, that want another high in price. So another jog is needed, down, up down, or even down, up, down, up, down, to try and turn the MACD line and RSI over into firm negative divergence, that would be 2 to 4 candlesticks which is 4 to 8 hours. So the near-term top may occur before the closing bell today but may be more likely tomorrow morning say before lunchtime.

Fed Chair Yellen will be testifying in front of the Senate tomorrow and usually stocks are buoyant for Fed appearances. Everything keeps going the bull's way. Yellen will  not want to make any waves but there is always the possibility of saying something that rattles markets. If the prior Apple 2-hour chart plays out with its neggie d and AAPL pulls back it would make sense that the broad market should take a rest as well in the 2-hour time frame. The upside target for the ascending triangle may occur further out say late this week or next week.

As this message is finished, the SPX prints a new all-time record high at 2327.40. The bulls are running; the RSI and MACD continue sloping upwards the bears need these two indicators to negatively diverge as explained above. 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.

Note Added 8:19 AM EST Before the Tuesday Opening Bell: The SPX is at new all-time highs at 2328 with an ultimate HOD yesterday at 2331.58 the highest number to ever print in history. The indicators are negatively diverged as explained above except for the MACD line remaining long and strong wnating another high in price after a pull back in this 2-hour time frame. Hence, a jog move, down, up, down, is likely. Stocks should roll over due to the low CPC put/call ratio. The guess would be for a top to occur before lunch. The chart above needs a down move then back up to the price highs so the MACD line can go neggie d, then the downside begins in earnest. A couple candlesticks are four hours of trading time. So stocks should top out probably before lunchtime and the SPX would be expected to drop from 40 to 120 handles into the end of the month and early March. If Yellen provides uber dovishness today to pump stocks higher, the top for stocks will likely occur any day forward this week.

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