SPX Daily Chart Overbot Rising Wedge Negative Divergence

The SPX motors across the 1472 level printing three hanging man candles and a doji over the last four days. All four candlesticks indicate a trend change but the following day follow-thru to the downside is required to verify the reversal. In these goofy markets, price decides instead to meander sideways and keep threatening for a reversal to the downside but merrily keeping a foot in the bull camp at the same time.  Financial earnings are key this week and now we have five heavy hitters that have reported; WFC, JPM, GS, BAC, and C. The financials are expected to lead the broad markets higher, it is considered the key to continued higher markets (since the pump of housing and retail sectors is long in the tooth). The results are mixed, BAC and C today are uninspiring and negative pre-market.

The volume is unimpressive, especially considering this is the start of the year. Lots of retail investors are throwing their Christmas money at the markets but the blue squares show the distribution taking place. Once price makes a new high, the retail guy gets all bulled up and excited, the funds continue to pump the markets with words, and the larger sell volume on the other side shows the funds dumping shares to Joe Sixpack. The price action is taking on a rising wedge pattern, bearish.  With the sideways choppy action, lining up the indicators is like herding kittens, once they are ready to line up one goes off on its own, then when that lines up a different one wandered off. Negative divergence is in place now except for some slight momo in money flow that is long and strong over the last week. Projection is for some price action into the apex of the wedge, but price should roll over at anytime. If price receives a strong thrust higher watch to see if the RSI moves up, or not. 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.