SPX Daily Chart Overbot Negative Divergence Developing Expansion Pattern

The expansion pattern, or megaphone pattern, highlighted a few days ago continues playing out (thin blue lines) with price at the top trend line. The indicators are negatively diverged except the MACD which peaked with the peak in price (still a hair long and strong). For negative divergence the MACD would need to be lower as price made the new high. The RSI is sketchy as well moving sideways but this is negative divergence since the RSI is out of gas as price prints higher. Thus, price should come back up for one more look after a pull back due to the MACD line and potentially the RSI moving into overbot territory.

The SPX S/R is previously posted with key resistance at 2046, the all-time intraday high at 2046.18. Support below is the all-time closing high at 2039.82, 2038, 2035, 2032, 2030, 2024, 2016-2019 (November began at 2018) and 2011. Price may pull back to one of these support levels and then push higher one more time, perhaps in concert with the typical OpEx week seasonality that occurs where stocks move higher from a Tuesday low into a Wednesday high. There are four consecutive doji candlesticks ofr the lasts four days verifying the bull-bear fight last week and that a trend change may be on the table.

The projection is for perhaps a move lower to 2024-2035 support and then recovery to 2042-2046 (so the MACD line can firmly show neggie d), then roll over for more extended downside ahead perhaps honoring the expansion pattern that would target 1800-1860 in the new year. 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.