SPX 1-Hour Chart 200 EMA Cross Overbot Rising Wedge Negative Divergence

Here is a look at the 60-minute about two hours into the Thursday session.  The red rising wedge is ominous, ditto the overbot conditions and negative divergence, just like the 2-hour chart that is setting up.  The indicators have a smidge more upside momo (short green lines) so price likely wants to print higher highs today, the HOD thus far is 1561.39 which is the high for 2013, and that should lock in the negative divergence across all indicators and time frames.  The 200 EMA is key on this chart and one of Keystone's Short-Term Signals. The bears had a one day party in late February but the bulls slapped them once again and took the booze and party favors starting the three-week run higher. The pink circles show the teases that resulted in bounces; look at how price tested the 200 EMA exactly to begin March, which gives the 200 EMA even more clout and importance.

Price will come back down to the 200 EMA, it is simply a matter of from which level does the SPX start lower. The pink box in the right margin shows how the 200 EMA and important 1525 horizontal support are forming a confluence at 1525 that will likely act as a magnet for price. The inverted H&S is shown with head at 1488, neckline at 1525 and target at 1562 achieved today.  The chart likely needs one to three candlesticks to create the slightly higher high in price, and correspondingly lock in the negative divergence satisfying the short green lines, which is one to three hours of time. That places the markets in the 1 PM to 3 PM period this afternoon.  The bulls may be able to push the markets into the close with elevated prices but cannot escape the set-up occurring. This may be analogous to the North and South soldiers camping at Gettysburg, all knowing that a battle will take place at any time, hours ahead, and it may be epic, the sad harmonica music echo's through the valley.

Projection is topping out in the 1560-1565 range in the hours ahead, or at anytime, and then downside ahead. Price will likely work lower to test the support and 200 EMA at 1525 in the days ahead. Direct support below is 1557, 1553 and 1548. The all-time closing high is 1565.15 and all-time high at 1576.09. The bulls keep inching markets higher so simply watch the effects on the negative divergence for clues moving forward. The bank stress test results and dividend and capital information is released at 4:30 PM EST, after the closing bell, and may serve as a key market catalyst moving forward. 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.