SPX 2-Hour Chart Overbot Rising Wedge Negative Divergence
The 2-hour chart shows the explosion higher this morning. The SPX touched 1557 so the 1560's appeared immediately. The HOD and new 2013 high is 1561.39. The inverted H&S shows head at 1488, neck line at 1525 and target at 1562, which is now achieved and satisfied, completing the pattern. Same ole story, rising wedge, overbot, negative divergence. There is some momo remaining in the RSI, stochastics and ROC so a jog move may be needed today which requires at least two candlesticks to line them up with firm negative divergence, so that is about two to four hours. To add to the drama, the closing all-time high is 1565 only a few points away. The all-time high is 1576.09. If the SPX plans on printing above the all-time closing high it probably needs to occur by lunchtime since the charts should be firmly negatively diverged into the afternoon and create selling. 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.
HI KS, one quick question: might be necessary considered as a sign of topping of stock markets the decorrelation between risk FX pairs (i.e. eur/usd) and the general risk sentiment on stocks?
ReplyDeletethe stocks keeeeps rising and crude's falling from 98, copper is quite ill and if it looses 3.4 bad things might happen to it.... eur/usd already has a declining channel ...and stocks just keep rumbling ...
The intermarket decorrelation is a sign of a top or this idea doesn't work?
Thanks,
V
oh... and also the volumes!!! today it's just like during Christmas or new year's eve day !!!
DeleteThe volume also tries to tell us something...
V.
The asset relationships are skewed but that is not something that indicates tops, it is only something that indicates market direction. The weaker yen drives the dollar higher in the dollar/yen pair, the weaker euro helps buoy the dollar in the euro/dollar pair. With most nations debasing, the dollar is turning out to be a default currency. So the QE is not weakening the dollar like all previous QE's did, that is why gold is not moving higher. The weak oil, copper and commodities say the global recovery is weak but the Fed's easy money is pumping dividend stocks, blue chips, REIT's, utilities all higher. Some money is leaving commodities and pumping into these perceived safe divvy plays. So the asset relationships do appear to be changing but several days and weeks are likely needed to see how it pans out. The SPX should be moving in conjunction with the commodities but it is not currently. Volume is important and the light volume does make the move higher suspect.
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