SPX S&P 500 2-Hour Chart; Overbot; Rising Wedge; Negative Divergence; Upper Band Violation

Waiting for the 2-hour to top out the last few days has been like waiting for Godot. Markets will likely be spanked lower due to the uber high NYMO and low CPC and CPCE put/calls. The stock market has received some serious bullish pumping since last week from President Trump, the Fed, China, the PBOC, the ECB, the BOJ and Fed members. Central bankers around the world are flapping dovish wings so stocks rally from last week into this week. The central bankers are the market.

However, the chart has priced in the joy. The SPX prints a new higher high and all the chart indicators are neggie d (red lines). The RSI and stochastics are overbot agreeable to a pull back. The rising wedge is bearish. All these parameters say the smack down is at hand.

The upper band is violated so the middle band at 2592 is on the table. Look at those tight bands. A huge move is on tap although the bands do not tell you which direction. The market bulls are trying to create the huge breakout higher but it is strange since the indicators do not have any pep (they are negatively diverged). Stocks could bounce again on more central bank or President Trump happy talk but the chart says down. Considering the tight bands, the move down may be sharp and super fast. The S&P 500 continues higher today and is up 13 points at 2623 at the HOD.

The 50-day MA is at 2629. The 100-week MA is 2618. The 20-month MA is 2663. The 50% Fibonacci retracement for the crash from 2941 to 2350 is 2644. Price is teasing that 50-day resistance. This 2618-2629 level is a formidable resistance gauntlet. That is why price is having trouble getting up through. The bulls are chomping away at the resistance but they do not have a whole lot of strength as the chart above shows.

The expectation is for the neggie d spankdown to occur now which is interesting considering the tight bands. Bring on VST index shorts. You can time short entries with the TICK printing +600 and higher. A quick downside trade is expected. 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.