Friday, June 9, 2017

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

The bulls keep pumping stocks higher with new all-time records occurring today across the board. The SPX prints a new all-time high at 2446.20 and the day is young. The standard deviation bands (pink) squeezed in tight and squirted-out the sharp move higher. Price was about to break down at 2427 yesterday and instead the squeeze was to the upside about 20 points thus far. The upper band is violated so the middle band at 2435 and rising is on the table. The price move has momentum, however, and power from the band squeeze, so the SPX may climb up the upper band for a few candlesticks.

The indicators are in full negative divergence (red lines) with the higher high in price forecasting that the top is in for this move. Again, today's joy has momo so you have to watch the chart indicators to see if any take out the prior highs from earlier this week. As long as those red lines for the indicators continue sloping downwards, neggie d, then the top is in for the S&P 500 in this 2-hour time frame.

The stochastics and RSI lurch higher over the last couple candlesticks so that hints that a couple or three candlesticks may be needed to top things out, and, if, as mentioned, the negative divergence remains, then price will roll over to the downside. This would be in sync with the low CPC put/call ratio hinting that a near-term top is very close. 2 or 3 candlesticks are 4 to 6 hours of trading time which would be anytime today or into Monday morning (for the top to print).

The blue circles show the gaps that are in play. Price has filled the gaps except for the 2435-ish and 2415-ish gaps on the downside. The maroon lines show the prior top in SPX earlier in the week. The rising wedge (maroon), overbot conditions and negative divergence indicated the top, which occurs, however, the MACD line remained long and strong (green line) hinting that price will  likely come back up again for another higher high after it pulls back, and it does.

The expectation would be for stocks to top out today or Monday morning. The only thing that can change this would be if one of the indicators poked above the high from a couple days ago. This would extend the top a couple more candlesticks. As always, if the central bankers talk happy talk or if the government promises goodies for companies, stocks can rally. The rising wedge (light purple lines) over the last month is interesting.
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 Saturday, 6/10/17: The SPX top-ticked at 11 AM EST at 2446.20 a new all-time high, then promptly fell on its sword. The S&P 500 sinks to a LOD at 2415 a 31-point intraday crash. Wow. That came on with a vengeance. The SPX then recovered to close down 2 points on the day, -0.1%, at 2432. Selling volume is robust. The CPC spikes to 1.06.

No comments:

Post a Comment

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