SPX S&P 500 Daily Chart Triangle Breakout Overbot Negative Divergence Developing

The SPX breaks up and out of the blue sideways triangle pattern. Note the fake-out move lower in late January with price dropping below the blue trend line creating cheers from bears then whammo, price quickly reverses to the upside, returns to the safety of the inside of the triangle then boom, explodes out the top side creating a bull victory. The triangle targets 2150-ish which would be the upper red trend line.

The SPX will want to back kiss the 20-day MA at 2058 and rising at some point forward. The red lines show universal neggie d across all indicators but in the very near term (last few days) price has some long and strong momentum (green lines). The pink box shows the ADX indicating a strong trend higher for price but that petered out as the new year began. Even though stocks are printing new highs the ADX is at 18; it needs to move above 25 to prove there is a new strong uptrend in place paving the way to a happy bullish year ahead. If the ADX remains stalled, bulls got nothing.

The short term momo wants a higher high or highs in price over the few days ahead after any short pull back occurs. That momo must burn off before price can roll over to the downside; it will only take a couple days or so. Projection is sideways to sideways higher into mid-week then a pull back begins.

Stocks are almost always bullish during the Fed's congressional testimony on Tuesday and Wednesday. The month of February typically ends down and also when a month is all up, like February, the last couple days will tend to be down. Thus, mixing all this up and sprinkling some magic voodoo dust on top, the SPX may stay buoyant into Wednesday then sell off moving into March. Congress has to agree to fund the Department of Homeland Security this week or the DHS will receive a partial shutdown come Saturday so this may create market angst. 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.