Sunday, June 11, 2017

SPX S&P 500 Weekly Chart; Overbot; Negative Divergence; Upper Band Violation

Keystone posted the SPX weekly chart highlighting the likely top 5 weeks ago (red lines) which occurs but interestingly, price comes back up for another higher high. There was plenty of market drama last week with the UK election, ECB meeting and former FBI Director Comey testimony on Capitol Hill. The SPX prints a new all-time record high at 2446.20.

Note that with the new price high the chart indicators remain negatively diverged (maroon lines). Price is moving higher on fumes; there is no underlying strength remaining. Stocks are typically bullish heading into a Fed meeting and Chair Yellen provides the rate decision and holds a press conference on Wednesday afternoon, 6/14/17. Yellen's decision may be the catalyst for the downside in stocks to begin, or, if not, a jog move may occur where price is up next week then moves lower the week or so afterwards. The neggie d says price is out of gas for further upside on this weekly basis.

Price has violated the upper standard deviation band so the middle band at 2367 and rising is on the table. The blue rising wedge is very ominous since the collapses from rising wedges can be quite dramatic. It would not be surprising to see the rising wedge send the SPX to 2050-2200 over the coming months. The expectation is for stocks in the nearer-term is to top out in this weekly time frame and begin moving lower for a few weeks or months ahead. 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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