SPX S&P 500 2-Hour Chart; Overbot; Rising Wedge; Negative Divergence; Upper Band Violation; Price Extended

Here is the S&P 500 2-hour chart to supplement yesterday's chart. The red lines highlight the neggie d and rising wedge that wanted a spankdown. Price did begin retreating and came down to barely kiss the middle band but then the FOMC announcement occurred at 2 PM EST on Wednesday, 7/26/17, creating stock market joy. The Fed is in no hurry to raise rates since they acknowledged the lack of inflation (reference Keystone's prior inflation-deflation article). Thus, easy money continues. The central bankers are the market.

The SPX continues printing new all-time record highs including today at 2482.76 the highest number ever for the S&P 500. Strike up the band. The jugglers and dancing girls are already entertaining the crowd as the bread and circus days rage on.

Price prints another higher high even though technically it did not have the juice to move higher. The lift can be directly attributed to the Fed and the US dollar index dropping which pumps commodities and commodity stocks higher which pumped the broad stock indexes higher.

With the higher high in price, the indicators remain negatively diverged. Keep an eye on the RSI trying to sneak to a new high. Overall the chart has reset since the FOMC announcement and remains neggie d wanting to see a pull back. Give it one more candlestick with that RSI to make sure the newly found Fed joy is all priced in.

The chart should spank price lower in this 2-hour time frame going forward as long as the RSI does not move any higher. The low put/calls have been forecasting a pull back for the stock market for the last week. Price violated the upper band so the SPX should print at the middle band at 2475 for starters and the lower band at 2465 is also on the table. The SPX may want to come down and explore that huge gap at 2460-2465. If price falls through the gap at 2465 to 2460 and lower, that would be an island reversal pattern.

It looks like the bears will have a turn at bat after a delay due to more central banker pumping. 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.