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

Here is an update of the S&P 500 daily chart from the weekend. The chart is setting up with negative divergence and the idea was to watch the MACD line to see if it could move higher and it did. The other indicators are neggie d (red lines) wanting a pullback but the MACD line moves higher, long and strong, wanting another higher high in price.

The central bankers are the market. Stocks typically rally into the FOMC rate decisions about 80% of the time so traders were in a rush to buy equities believing it will be all upside into the Fed decision Wednesday afternoon.

Putting the central banker intervention to the side, the chart set-up would typically create a jog move for a couple days dropping lower due to the neggie d, but then recovering for a higher high in price due to the MACD fuel. When price comes back up, if the MACD line negatively diverges, the top is in. So this would be say, down today then up tomorrow for the potential top. However, the central bankers always have their thumbs on the scale (with the pending rate decision) and stocks remain buoyant.

Price violated the upper standard deviation band requiring a move at least back to the middle band at 2613 and rising. With the long and strong MACD line, price wants another higher high so the upper band at 2669 remains on the table. The chart is topping out but the Federal Reserve is the wild card. If Yellen expresses dovishness on Wednesday, equities will pop higher. Taking the Fed out of the equation, stocks would be expected to slip today, then rally tomorrow placing a top with the MACD going neggie d. 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.