SPX S&P 500 Weekly Chart; Positive Divergence Developing; Lower Band Violation

The weekly chart is setting up with positive divergence bouncing price higher. When the SPX dropped to the low, the RSI, stockhastics and money flow are positively diverged creating the bounce on the weekly basis. Ditto the oversold stochastics. The S&P 500 rallies into the third week, however, the histogram and MACD line were not possie d when price made the low; they are weak and bleak. These indicators prefer to see price come back down again towards the lows on this weekly basis.

As usual, charts can only price in all news and information up to the second but have to digest any new news bites. On Friday, a triple-barreled bullish volley was fired. The Fed is more dovish, the PBOC is pumping and the jobs report was happy with higher wages. Then, yesterday, the Whitehouse wanted to keep the stock market rally going into today so they declared that the US-China trade talks are going well to goose prices higher. All this new bullish news may negate the need for the SPX to come back down, it may be off to the races with the multi-week rally.

The uber high NYMO and low put/calls say a near-term top is at hand any minute, any hour, any day ahead. The S&P futures are up +20 as this is typed 90 minutes before the opening bell for the Tuesday regular session. That will be great to short into for VST and daytrading. So there should be some weakness appearing in the days or week or so ahead after a top prints at anytime. After violating the lower band, the SPX should rally to the middle band now up at 2723 and dropping.

Note how price held the 200-week MA at 2354. This 200-week MA carries major clout. If it fails ahead, it is lights out for the stock market.

There will likely be a near-term top printing at anytime, then a few days, or week or so of down, perhaps to the 2340-2400 area, maybe real sharp and quick to scare everyone, then a V bottom and rocket launch higher and the mutli-week rally begins in force. The dip over the coming days may be smaller maybe only a little 20 to 50 point drop in the SPX and then recovery. It depends on President Trump's tweets and theatrics. 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 8:55 AM EST Tuesday Morning, 1/8/19: President Trump tweets that the US and China trade talks are going great. Of course he does. S&P futures pop to +24. King Donny is smiling from ear to ear, loving the spotlight and preparing for an epic address to the American people this evening.