SPX Weekly Chart

The SPX weekly chart receives a negative divergence spank down over the last three weeks but the bears stall at the important 20-week MA at 2014.61 and rising. Price pierced below the 20-week to 1988 but recovered. Price tested the same level the week before which creates a tweezer bottom pattern that is bullish (small purple circle). The SPX will begin a new candlestick when the opening bell rings tomorrow and a failure through the 2015 level will target the 50-week MA at 1949.

Looking back over the last two years it is obscene how the Fed and other central bankers have distorted markets and hijacked price discovery. Look at how price is elevated above the moving averages receiving liquidity gooses every step of the way. All Hail the central bankers! Praise their magic! The SPX will need to revert to the mean including down to the 200-week MA which has not been touched since 2011. The stochastics are ovebot and have a long way to drop. The MACD cross is negative. The chart is bearish across all indications except for that little tweezer bottom. Perhaps the bulls may create a relief rally this week after the 3-week down move, to satisfy the tweezer bottom, and then the down trend would resume afterwards.

Markets will be a difficult call in coming days with the ECB QE announcement on Thursday morning, the Greece vote on Sunday, 1/25/15 and the FOMC decision on 1/28/15. High drama is on tap over the next seven trading days. Overall the chart above is bearish and hinting at more down ahead as the weeks play out. Watch to see if the RSI slips into bear territory at 50%, or not; that will tell the story. Also, the stochastics dropping under 80% would create near-term downside juice. 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.