SPX S&P 500 Daily Chart; Overbot; Rising Wedge; Negative Divergence In Play

The topping saga with the SPX daily chart continues. Keystone mentioned in the prior post about the price high occurring with the high in the RSI and stochastics. This slightly amount of long and strong strength is enough to keep stocks elevated in this sideways zombie state this week. Price is moving through a sideways triangle and will have to commit to an up or down direction today.

Market bears would have been best off if price would have simply came up to 2280, a higher high in price, with the negative divergence remaining in place across all indicators, since that would call the top. Instead, the RSI and MACD line had remained long and strong and price is teasing matching highs so on one hand you can say this is close enough for government work and the top is in.

Price is overextended above the moving average lines and needs a mean reversion lower. That bottom thin red trend line is being tested, also the bottom trend line of the rising wedge pattern. The money flow is weak and bleak. The selling volume was large on Tuesday.

The expectation would be for price to move lower from here, or, if another top occurs over the next couple days, and the neggie d remains in place, that will be the top at 2280-ish. Bulls need a positive news story or promises of more easy money from central bankers which would launch stocks higher ignoring the chart. Stocks need to correct lower to take a breather but comically, now everyone is calling for a pull back in stocks since the parabolic move was too much too fast. The expectation for a pull back likely helps create buoyancy in prices this week. 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.