Monday, August 6, 2018

SPX S&P 500 Daily Chart; Overbot; Negative Divergence; Upper Band Violation

The SPX floats higher to 2848 teasing the upper standard deviation band at 2850. Price may tag the 2850-281 level which opens the door to a retracement to the middle band, the 20-day MA, at 2814, and rising. The SPX matches the high from late July and you can see the universal negative divergence across all indicators (red lines) so the S&P 500 should run out of gas in this daily time frame. Price is extended above the moving averages and needs a mean reversion lower. Stochastics are overbot.

The ADX line is in the cellar at 11.82. This is very interesting because it says the uptrend is not a strong uptrend despite the big rally from late June and actually from the April bottom.

The chart hints at a double-top, or M top, in play with price likely wanting to target the 2814-2828 level. Stocks are very emotional and news-driven lately. Today, oil is goosed higher which creates the run higher in equities. Volatility is slapped lower to levels not seen since the late January early February time period. VIX is down to 11.28.

The SPX tags 2849 as this is typed continuing to tap on the upper band. Check that, now surging above 2850. Check that again. Price now tags the 2851 level with a HOD at 2851.13 officially tagging the upper standard deviation band. As long as the RSI and MACD line do not overtake the prior high, the expectation would be for stocks to top out in this daily time frame. 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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