SPX Monthly Chart Overbot Rising Wedge Negative Divergence Price Extended

The bulls continue an upside rally with the SPX printing new all-time highs now above 2100 for the first time in history. Bow at the feet of the central bankers! Hail their accomplishments. Their power and majesty knows no bounds! Stocks rally this afternoon after Greece said a new plan would be provided tomorrow to try and resolve the bailout drama. Traders are fully on board with ECB quantitative easing and expect big upside in European stocks this year and for US equities to remain buoyant as well.

The new SPX price highs occur with negative divergence remaining in place so Keystone's call on a multi-year top at hand remains in effect. Remember, the monthly chart was highlighted as the neggie d formed with the red lines. The MACD line was stubborn not wanting to curl over but at the December price high did roll over and the universal neggie d across all indicators forecasted the initial spankdown and a multi-year top at hand. The selling occurs to begin the year but price comes back up again for another new price high over the last couple days. The market bears will win moving forward as long as the indicators stay below the neon green lines in the right margin (since this maintains negative divergence) and this is very likely and would be expected.

It is somewhat surprising to see price come back up but the power of the central banks is astounding. With this price high and the neggie d in place, with overbot conditions, and the rising wedge; all forecast a spankdown on tap. Market selling would be expected for March. Price is extended way above the moving averages needing a mean reversion. It is very likely that the SPX is printing a multi-year top currently and once price rolls over again these levels may not be seen again for months, or years. The red rising wedge is ominous; the collapses from rising wedges can be quite dramatic. 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.