SPX Weekly Chart Rising Wedge

The weekly closing and intraweek high in July was 1709.67. The weekly closing high in September was 1709.91. The blue line shows this important resistance at 1710 where the stakes are big. The red rising wedges are dominant and exhibit multiple price touches to add to their validity, however, the bumps up against the blue line cannot be ignored for a potentially developing ascending triangle. The 1710 resistance is obviously important since bulls will run higher if it is taken out while bears will flex their muscles to the downside if they hold the line at 1710. However, even if the bears kick price lower, the lower red trend line is key, since bears would need to move under the 1680 level to negate the potential ascending triangle under development. If price breaks above the 1710, the far higher targets of 1780 and perhaps 1800 may come into play.  The two top trend lines would have to be taken out at 1722-ish and 1750.

On the bear side, the two negative divergence smack downs (red arrows) were easy enough to call as  they occurred. The indicators remain weak, however, the political upside orgy last week has done much to raise optimism and fuel the bullishness. Watch the thin red lines for the indicators to see if any move higher occurs as price tests 1710. If negative divergence remains, with price at 1710 or higher, then price will receive another spank down. If the indicators move above the thin lines, the bulls are gathering further upside juice. Last week's candlestick is a hammer and an outside reversal week which highlights a potential trend change. This week would need to follow through to the upside to verify the trend change higher. The volume candlesticks show more bullish interest in September than July which brings price higher for another look at or near this 1706-1710 level. Bulls win above 1710. Bears win below 1706. On this weekly basis, if bulls break out above 1710, watch to see if 1722 holds, or not. If bears stay under 1706, watch to see if 1680 holds, or not. Markets are a coin-flip due to the ongoing political circus. President Obama and the Senate turn down all the House's suggestions so the government shutdown and debt ceiling limit theatrics continue. Shutdown is in day 13. Debt ceiling limit is 4 days away. No talks are scheduled today. 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.