SPX Daily Chart Overbot Negative Divergence Central Banker Intervention and Political Can-Kicking Highlighted
The bears have been handed the short end of the stick this year. The bulls have lots of help with the Fed, ECB and other global bankers propping up the markets. The first week or so of the year was prime time for a sell off to begin, even after the upside fiscal cliff can-kicking orgy move occurred. During the second week of January, there were rumors circulating on trading floors that the House was warming up to the idea of kicking the debt ceiling can down the road, and they did, so that resulted in more upside market momo. The House voted to extend the debt ceiling limit in mid-December and note the buying volume in play. Folks realize that the politicians will always kick the can, no doubt about it, so the long buyers are jumping in, donning their toga's, participating in the upside orgy while channeling Caligula.
The markets pump higher and the attractive negative divergence two week ago was temporarily negated due to the upside thrust on the political news. The chart took a few days to price in the latest bull thrust and has now made three new highs in succession, the three blue dots. The green lines for the RSI, MACD line and money flow wanted to see one more high in price, which now occurred with Friday's big move. The indicators are now universally set up with negative divergence so a spank down is on tap. The bears will be given the ball now but how far lower will they be able to run? 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.
''The indicators are now universally set up with negative divergence so a spank down is on tap. The bears will be given the ball now but how far lower will they be able to run?''
ReplyDeleteVery good question KS.
In January we've all seen what happend ...+ 5 or 5.2% spx higher.
For February on the menu we have .... http://www.newyorkfed.org/markets/tot_operation_schedule.html
Almost daily Pumping Ben is providing ammo for bulls. Unsterilized ammo (qe4 is no sterilized as QE Op. Twist was.). So unsterilized just like in case of qe 1 and qe 2. And you know how the market behaved at that time ...
Do bears have billions on a daily basis? I doubt it.
The Almighty Ben is beyond common-sense and TA.
V.
Yep, and that is likely why Tepper was telling everyone to buy, the Fed stimulus now is more similar to QE1 and QE2 and packs more punch than Operation Twist.
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