SPX Daily Chart Upper BB Violation Overbot Rising Wedge Negative Divergence

The SPX daily chart is another time frame that is negatively diverged preferring to see a spank down. Friday's candle is a dragonfly doji candlestick, note the flat top and long lower shadow. This candle illustrates the sell off on Friday but then the bulls rallied the troops to close near the highs. Even though the bulls recovered, this candlestick now casts doubt on the recent uptrend. The dragonfly indicates a trend change should occur and this will be verified, or not, in Monday's and Tuesday's action. The upper BB was violated several days ago and price has printed higher highs although moving away from the upper boundary. When the upper BB is violated a move to the middle BB (now at 1441) would be expected, at a minimum, and many times a move to the opposite BB would occur (now at 1399).

The 150-day MA slope is moving steadily up recently which is a very bullish indication (this is one of Keystone's Cyclical Signals).  Note how the 150-day moving average flattened out during November indicating party time for the market bears, but as December moved along the bulls ran over the bears and the 150-day MA is sloping upwards again.  Watch this closely moving forward. Price is above the 20-day MA and the 20-day MA is above the 50-day MA, all bullish indications. Nearly all of the above parameters repeat what occurred into the September top. The large sell volume candle in December corresponding to 1420-1445 provides a target for price to test. This jives with the middle BB at 1441.

The MACD line wants to eek out one more high in price but the other indicators are all negatively diverged across all recent time frames (bearish). Projection is for a move lower to sub 1450. Overall market action is anticipated to be sideways to sideways lower for the foreseeable future. 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.