SPX Daily Chart Overbot Negative Divergence

Remember over the last few days and week or two Keystone has been commenting on the long and strong MACD line on the daily chart wanting to see another price high after any pullback and this has occurred. Note now how price is printing new highs but the MACD line has leveled off perhaps ready to roll over to the downside. The indicators are universally negatively diverged across all indicators in both the couple-month and near-term few-day time frame. It is now all systems go for the bears, however, the one fly in the ointment would be the RSI that is teasing to want to move higher than the level from a few days ago which would create more oomph for a few days. The RSI did not reach overbot levels so this is on the table.

The blue line is an expected outcome if the RSI remains negatively diverged. If the RSI sneaks out a higher high in the near-term then the purple path is more likely with a few more days of buoyancy before price rolls over to the downside. A reasonable expectation would be to see a fight at the strong 2002-2003 support on Monday. The projection is for the SPX to begin tracking lower due to the negative divergence and the MACD line flattening and negatively diverging. Watch the RSI for any potential fly in the ointment for the bears. Of course the bulls are going to try and jam the RSI higher to keep extending the party for a few more days. Barring any further rise in the RSI, the expectation is for lower equity markets 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.