SPX 30-Minute Chart Megaphone Rising Wedge Overbot Negative Divergence Support Resistance 8 MA Under 34 MA

The blue megaphone pattern remains in place targeting lower numbers in the 1310-1325 area. The red rising wedge over the last couple weeks resulted in the top two days ago, with negative divergence creating the spank down. The purple lines highlight support and resistance (S/R) at 1413, 1410, 1406, 1403 and 1399. In early March, the low that created the bottom rail of the megaphone experienced positive divergence with the RSI and MACD histogram that bounced price (green lines). But note that the other indicators remained sour (red circles for MACD, stochastics and money flow) and want to see a lower low in price than the 1340-ish level.

Keystone uses the 8 MA and 34 MA cross as a critical indicator gauging bullishness versus bearishness. Note the bull-bear struggle in mid February with the 8 and 34 MA's unable to decide who will drive the bus (green and red circles indicate the crosses). The bulls won out and drove the markets higher into early March where the 8 MA fell under the 34 MA indicating market trouble ahead. Markets recovered four days later verified by the 8 MA crossing back above the 34 MA. This trend continued the upward market move on vapor volume into this week. On Tuesday, the 8 MA fell back under the 34 MA indicating market trouble.

The RSI under 50% is bearish, ditto the ROC under the zero line. Watch to see if the stochastics lose the 50% level. Projection is for the broad markets to head lower, as long as the 8 MA stays under the 34 MA. 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.