SPX Monthly Chart Secular Bull Overbot Rising Wedge Negatively Diverged

SPX monthly chart just printed a data point for April and we see that the markets remain in a secular bull since last August when Chairman Bernanke announced QE2 and free money for everyone. When price is above the 12 MA, the markets are in a secular bull, when price is below the 12 MA, a secular bear.

Last summer shows how the markets had actually turned to the secular bear side which means the markets were rolling over the falls and in the last instant, Bernanke saved them, and now, we are at an even higher level and deeper in debt. The start of the March 2003 rally is easy to see, this began when the bombs dropped over Iraq. Notice during the Fall 2008 crash how positive divergence did not bounce the index, but rather QE1 did. That hints at unfinished business below.

Now we are moving up into a rising wedge with overbot conditions. The MACD histogram, stochastics and money flow are negatively diverged indicating a pull back is in order. RSI would like to see another matching high after the pull back occurs, however, and keep in mind this chart is monthly time frames, so the topping and rolling over behavior should continue well into summer. The 10 MA is also handy to watch since price will cross the 10 MA before it crosses the 12 MA. SPX price would have to lose 150 handles before there is any fear of falling into a secular bear; a trader must remember that anything can happen over a couple months of time. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here or any links connected to this information. Consult your finanical advisor before making any investment decision.