SPX Daily Chart Overbot Rising Wedge Negative Divergence

The market bulls continue the party but this chart is not happy. Note the green lines for the RSI and money flow indicators that were long and strong and wanted to see another higher high in price--they received that higher high now and it occurs as the red lines for the indicators show negative divergence across the board. This divergence, along with the overbot conditions, and textbook rising blue wedge, show that a spank down is on the doorstep, it is simply a matter of how much of a pull back is received.

Note the volume candles continue to show lower participation as the markets move up. Probably the same traders and hedgies selling stock to each other to float things up, but one of them will end up as the last fool, that always holds the bag. Note the 150-day MA, the light green moving average line, the slight upward slope shows that the bulls are in control. Should markets start to sell off, bears will do no real damage, on a longer term secular basis, unless the slope of the 150-day MA flattens then slopes negatively.

Yesterday's candle has a small tail sticking up above the body so it is not a true hanging man candle, that typically forecasts a trend change, but we will say its a cowlick a la Alfalfa from the old-time television show Our Gang sticking up from the head, and watch today for follow thru of this candle which signals that a trend change is on tap. Projection is a spank down for the SPX at any time, it is simply a matter of how far down she will want to sell off before the dip-buyers come in. The Consumer Confidence at 10 AM plays a key role this morning and of course the LTRO news will be the main driver over the next 48 hours. 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.