Sunday, July 22, 2018

SPX S&P 500 Daily Chart; Upward-Sloping Channel; Overbot; Negative Divergence Developing

The S&P 500 is getting jerked to and fro by the non-stop news bites. Federal Reserve Chairman Powell continues to tout higher rates ahead but at the same time remains a closet dove. President Trump is commenting on monetary policy creating additional market angst. Stocks chop up and down exhibiting an upward bias in recent days.

The red lines show negative divergence in play. However, the short green lines for the MACD line and money flow indicate near-term strength. The market bears would have been better off to see the SPX make a matching high on Thursday which would predict a selloff but instead the jury remains out. Price did not come up to tag the upper standard deviation band, now way up at 2840 although it does not have to tag the upper band before pulling back.

Price does tag the upper rail of the upward-sloping green channel so a move to the lower rail at 2725-ish is on the table. The stochastic are overbot wanting a pullback but the RSI did not reach overbot conditions. It is a mixed picture.

The brown squares show extensive distribution days occurring; 13 distribution periods have occurred in the last couple months. This is the smart money handing off stocks to the dumb money. Each day the stock market pops, Joe Retail becomes excited and runs in to buy the stock market and the professional traders are very happy to pass their shares off to the sucka's. The smart money reduces their overall holdings in stocks as Joe becomes very excited buying the market since he saw a big up day the day before. 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.

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