SPX 60-Minute Chart with 200 EMA Cross Rising Wedge Negative Divergence

Here is one of Keystone's turn signals, the 200 EMA on the 60-minute. The blue squares show the month-long drama, the bulls successfully defended the 200 EMA in mid December only to then fold like a cheap suit days later. The SPX moved lower thru Christmas and then tested the 200 EMA as the wrapping paper was collected and placed in the trash.  Price failure occurs and the bears were off and running. The SPX came up for a back kiss, which succeeded, so it was smooth sailing lower for bears.  Alas, the green falling wedge formed and the positive divergence green lines, along with the fiscal cliff resolution and a launch occurred.  Price exploded thru the 200 EMA to begin the year and the bulls rule the roost.

The red lines show the negative divergence that Keystone was mentioning on Thursday and Friday for the 2-hour, one-hour, and minute charts. The red rising wedge, overbot stochastics and RSI, and negative divergence show that a smack down is on tap. The 1460-1461 is strong support.  If that gives way the next strong support is 1444.  If price retraces, note that a potential sideways channel may develop thru 1413-1444 that can serve as a holding area as the political clowns continue to play their reindeer games.  Considering the conditions described above with the red lines, a move to test the 1460-1461 is likely on tap for Monday.  Note that if the sideways channel develops, the 1430 level is in the middle of that range, and 1430 serves as the initial target due to the upper BB violation on the daily chart.  Projection is a smack down starting tomorrow, a test of 1459-1461 support will occur and likely fail taking price lower to test 1444 early in the week. As always, the most important thing on this 1-hour chart is the 200 EMA and price is above signaling bullish markets for the hours and days ahead. The bears should make a run to the 1425-1430 area this week that will decide who wears the pants, bulls or bears. 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.