SPX Daily Chart Rising Wedge Overbot Negative Divergence

SPX daily chart has been negatively diverged with the MACD and stochastics for the last three months creating the December pull back and now continuing to want to see further market selling. The RSI and money flow, as the strength of the recent bull rally keeps moving upwards, printed higher highs forecasting further highs in price, which the SPX has now attained. However, all the indicators are now lined up with negative divergence (blue lines) so a spank down of price is now expected. The rising wedge and overbot conditions will also help create the spank down.

The last two candles are a hanging man and a doji, both indicating a potential trend change. The weekly chart shows a long and strong profile, that is why the projection above shows a market pull back in the near term but the SPX will probably want to come back up again after the sell off. Projection is a pull back at the door step, a move down to the mid 1290's serves as an intial target but price should venture back up again, perhaps in concert with the China triple R lowering coming any time. 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.