SPX 60-Minute Chart 200 EMA Cross Fibonacci Retracements Rising Wedge Overbot Negative Divergence Developing

The SPX continues to move up through the red rising wedge. The indicators are in overbot territory with the histogram, stochastics and money flow topped out with negative divergence. The RSI and MACD line, however, are long and strong wanting to see higher highs after any pull back. The S&P futures are -5 so the SPX may open lower, and then the RSI and MACD will likely bring price higher again as the day proceeds. There would be from one to four more candlesticks needed to provide time for the RSI and MACD line to top out and develop negative divergence to place a firm top for price, so this is about 1 to 4 hours of trading time so equities may top out today and roll back over to the down side.

The SPX is under the 200 EMA at 1798.90 signaling bearish markets for the hours and days ahead. The bulls will reverse this signal if they can regain the 200 EMA. The 200 EMA cross is one of Keystone's short-term signals and an important bull-bear indication so pay close attention today. If the bulls close today above the 200 EMA, there is nothing but blue skies ahead and the stock market will move strongly higher well above SPX 1800. The bears must keep the SPX under the 200 EMA and the market selling will resume. The Fibonacci retracements are shown for the selling move from 1851 down to 1737. Price is dancing around the 50% Fib at 1795-1796. Any additional upside will send price to the 62% Fib at 1808. Note that the 1808 is very strong resistance (reference the SPX S/R article this weekend) and 1809.35 is the 50-day MA, thus, the 1808-1809 resistance is a major bull-bear decision level.

The three black lines can be used to gauge who is winning moving forward. Bulls win big above 1808-1809. Bulls are in the drivers seat and plan on moving higher if the 200 EMA at 1798.90 is taken out to the upside (a test of 1808-1809 R would likely occur). Bears will smile if they can hold the 200 EMA today. Bears will reinitiate downside market carnage if 1772 fails. Note the sideways channel through 1772-1800. As the SPX likely tops out today, price may want to move sideways through the 1772-1800 channel going forward. Projection is for the SPX to top out today. A test of the 1808-1809 R is not unreasonable but the 1803-1804 level may serve as a ceiling instead. If the bulls do manage to break up through 1808-1809, then the 1820's and higher are likely. This information is or 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.

Note Added 4:25 PM: The bulls manage to stretch the day out and close at the highs at 1799.84. The SPX dropped, then recovered as expected. The indicators are all negatively diverged now with the higher price high, as discussed above, so the bears are favored moving forward. The sneaky MACD line may want to squeeze out some more juice, and the MACD line on the 2-hour remains long and strong, so 1 to 3 more 2-hour candlesticks may play out to top the price which is 2 to 6 hours trading time. Thus, traders want to wait and see what Chair Yellen says tomorrow so the broad indexes are propped up and in idle mode. We will likely know by noon time. The charts favor a roll over to the downside moving forward but tests of the 1802-1803 resistance and 1808-1809 resistance cannot be ruled out. The projection would be a roll over to the downside from either 1800-1803 or 1808-1809 tomorrow. Of course, if Yellen, the dovish dove, flaps her wings and says the Fed just ordered a dozen new printing presses (taper the taper) then the markets will catapult higher.