Tuesday, February 21, 2017

SPX S&P 500 Weekly Chart; Rising Wedge; Overbot; Negative Divergence Developing; Upper Band Violation; Price Extended

The S&P 500 weekly chart rockets higher on the Trump Rally euphoria from the November bottom. note that price is near the upper standard deviation band but did not touch it, however, price had already violated the upper band in December. Therefore, that middle band at 2235 and rising remains in play. The bulls are sneaky taking price parabolically higher forcing every bear in the market to cover.

The red rising wedges are ominous. The red lines for the indicators show neggie d in play wanting a smack down in price but the MACD line remains long and strong. Price will likely come back up one more time after a pull back to satisfy the MACD on this weekly basis. Both the RSI and stochastics are overbot and negatively diverging. Thus, a jog move is likely, down, up, then down. So price may retreat over the next week or two to satisfy the neggie d shown by the red lines now, but then price will come up again to make the MACD happy, and then, if the MACD is sloping down showing neggie d, the top will be in on the weekly basis.

The ADX says the trend higher in price is not a strong trend despite its parabolic nature but the ADX is on the verge of moving up into that pink box that would label the weekly uptrend as strong and likely extend the buoyancy in the stock market.

The monthly chart hints at a major market top potentially occurring in the March-June time frame. The weekly chart wants a pull back now but price will come back up because of the MACD line. The weekly chart would be agreeable to a multi-year top occurring since its indicators are elevated in overbot areas which is typically a multi-year event. Stocks will likely retreat for a couple weeks, then come back up for a matching high perhaps into the Fed rate meeting on 3/14/17 and 3/15/17, then down again as long as the MACD rolls over. 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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