SPX S&P 500 2-Hour Chart Overbot Negative Divergence Upper Band Violation

We were watching the 2-hour last week remember the red rising wedge that formed. The multi-year high in the NYMO and uber low put/call ratios indicated a near-term top at hand and price did sag, however, with the ECB drama last Thursday markets became erratic and sideways eventually breaking out higher. The central bankers are always meddling and the Fed is on tap on Wednesday. Nothing has really changed, however. The NYMO remains at a multi-year high hinting at a near-term pull back and CPCE clearly verifies market complacency.

The dark red lines show neggie d remains in place. Price has violated the upper pink band so a move to the middle band at 1997 and even the lower band at 1970 is on the table. The MACD line has some juice over the last three hours which may create a jog move higher for another candlestick (2 hours) but the expectation would be a top now anytime over the coming hours. If price makes a higher high, note the indicators to make sure they are neggie d over the last few candlesticks as the thin red lines in the right margin show. If so, it would be all systems go for bears. If one of the indicators poke out a high above the thin red line then price will likely make another higher high and then not roll over for another 2 to 4 hours.

For the downside, the 10-month MA at 2015 is critical. If 2015 fails, price will probably drop like a stone to 2002. For the bulls, the SPX needs to punch above the 200-day MA at 2019 which will shoot price to the 12-month MA at 2029 for a hugely important bounce or die decision. 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.

Note Added 11:58 AM: The SPX is at 2015.19 and the 10-month MA is 2015.07. What will happen? This is serious business. Bounce or die.

Note Added 7:38 PM EST on Tuesday evening, 3/15/16: The SPX falls through the 10-month MA at 2015.13 today but the stock market does not collapse as would be expected. This is due to the imminent Fed rate decision tomorrow; traders are in a holding pattern until then. The US primary elections in the presidential race are important as well with returns coming in as this is typed. Looking at the SPX 2-hour, the neggie d remains over the last week or so, and over the last few candlesticks, however, note how the tiny point in the MACD line corresponds to the intrahour high print five candlesticks ago. Thus, the door is open for the SPX to come back up fo ra couple candlesticks which basically takes stocks into the FOMC decision. Markets appear to want to remain in suspended animation until Yellen brings the tablets down from on high tomorrow and tells traders how to trade. If the technicals have their way, stocks will sell off as explained above. The SPX below the 10-month MA is very dire and should result in collapse. Bulls will celebrate if the SPX remains above the 10-month. Looks like the fireworks will hit at 2 PM EST tomorrow. SPX price 2015.93. 10-month MA 2015.13.