SPX Daily Chart Megaphone Pattern Two-Leg Bear Flag

Here is an update of the ongoing megaphone pattern for the SPX shown with the dark blue lines. The more touches on the upper and lower trend lines that form the megaphone, the more street cred it is awarded.  The lower rai lof the megaphone would target a price of 1170-ish in August-September, should the pattern play out.  The green bars show the positive divergence bounce in early June but the MACD line (red line and circle) wants to see another test of the lows at 1280-ish. The red liens show the negative divergence top that just occurred a few days ago; all the indicators firmly displaying negative divergence and wanting to see a smack down, which occurred.

Note the two-leg bear flag pattern in progress. To keep it simple for Keystone's simple mind, 1410 to 1280 is 130 points difference.  The sideways consolidation occurs for the last two months forming the flag.  If the second leg down has now started from 1380, the lower target is 1250-ish should the bear flag pattern play out.  The 1250-ish would satisfy the needs of the MACD line from early June. The RSI and stochastics are under the 50% level, bearish. Watch the bracket formed by the 20-day MA at 1352 above, and 50-day MA at 1333 below. The price move out of this bracket is very important.  Projection is sideways to sideways lower moving forward with 1250 as an intial downside target as the days/weeks move along. SPX 1258 is the starting number for 2012. 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.