SPX 30-Minute Chart Overbot Negative Divergence

Two H&S patterns are in play. The pink H&S was set up yesterday with a target in the low 1340's if the 1355-1357 neckline gave way, which it did today, but note that when price came up for the back kiss, price continued higher and the neckline failure was negated. The neon green H&S is now in play with a new right shoulder. Head at 1367, neckline at 1352-1354, targets 1337-1341.

The red lines show the negative divergence top identified on Tuesday that caused the spank down. Note the blue lines that then provided positive divergence for a price bounce. But the RSI and MACD line (teal lines) printed lower lows and were not positively diverged. This suggests that price needs to come back down to test the 1354 neckline area to satisfy these two indicators. For the move higher today, the purple lines show a long and strong profile that says a higher high will be needed after a pull back. The stochastics, however, are negatively diverged and will help create price weakness early tomorrow (gray line).

The 8 MA moved back above the 34 MA which is bullish. Note, however, the weakness in the slope of the 34 MA which is bearish for price action moving forward. Projection is more sideways but price needs to take a look at 1354 again and this may happen as early as tomorrow. Failure at 1354 opens the door to 1340-ish. 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 financial decision.