SPX Weekly Chart; Upper Bollinger Band Violation; Overbot; Three Rising Wedges; Negative Divergence; Stimulus-Pump Comparisons

Lots to look at in the weekly chart before the new trading week begins. There are three red rising wedges in place now, bearish. The RSI, stochastics and money flow are all overbot on this weekly basis, bearish.  The red lines for the indicators show the negative divergence now in place across the board on the multi-month basis.  The negative divergence accurately predicted the April spank down we watched form and roll over in April.  The short green lines for RSI, MACD line and MACD histogram, however, are long and strong over the short couple month time frame Stochastics and money flow are negatively diverged in this short time frame wanting to see a pull back right now, perhaps this morning's weak futures point to the beginning of this short pull back.  Then the short green lines will have to be addressed with price coming back up to the current price levels once again,at that time, universal negative divergence is expected over all time frames and all indicators which should point to the roll over for a more extended and sustainable down move. The black lines in the margin show one potential path, a mini M Top type pattern say over the next three to four weeks with the roll over occurring in October.

The volume over the last two weeks shows the bulls slightly outshining the bears which would also reinforce a move back up in price after a pull back occurs. Then, volume would be expected to increase as/if the SPX rolls over in th ecoming days and weeks. The upper Bollinger Band was violated over the last cople weeks.  The black dots show how price will move from the upper to the lower BB, and back again, as time moves along. Now it is the bears turn again in this weekly intermediate-term time frame.

The central bankster stimulus pumps are shown in the light blue squares. QE2 was a 350-point pump, 34%, over about 8 months. Operation Twist and the LTRO 1 and 2 pump results in a 300-point pump, 27%, over about 5 months.  Thus far, the QE3 pump results in a 200-point pump, 16%, over about three months time. What does all this say? Starting with the time, QE1 was a 13-month pump, so note the beauty in the Fibonacci sequence occurring; 13, 8, 5, 3.  Thus, the current 3-month rally would already have achieved its target based on this metric.  For the point moves and percentages, continuing along in the sequence would target about a 20% rally for the current QE3 pump, with about a 250-point move off the 1270-ish bottom which places price in the 1520's target area.  "Don't fight the Fed is the mantra," but the current rally appears far along already.

Mixing the entire analysis into a bag and shaking it, results in a projection of a price move down to the 1453, 1446, perhaps 1440 support levels, then back up again to 1460-1480, then roll over.  1520 cannot be ruled out. If volatility moves higher, that would facilitate large intraday spikes where lots of ground to the downside, then back up, then back down can be covered in a very short amount of 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.