Thursday, August 9, 2018

SPX S&P 500 Daily Chart; Overbot; Rising Wedge; Negative Divergence; Upper Band Violation; SPX Teasing the Record High at 2872.87 from 1/26/18

Here is an update of the S&P 500 daily chart. Earlier this week, the potential double-top was highlighted but the bulls keep running higher with price printing higher highs taking that pattern out of the picture. Remember, the idea was to watch the behavior of the RSI and MACD line should price move higher.

The SPX gaps higher on Tuesday printing a hammer candlestick and yesterday printing a doji both hint at a trend change on the table. Price tags the upper standard deviation band at 2861 so the middle band, the 20-day MA, at 2821 is on the table as well as the lower band at 2781.

Stochastics are overbot and RSI was overbot 3 week ago and now near-overbot agreeable to a pullback. The red rising wedge pattern is a bearish indication.

As price prints the higher highs the last three days, the red lines show negative divergence remaining firmly in place. In other words, the fuel tank is empty and price rise on fumes. The expectation is for stocks to retreat in this daily time frame.

Markets are very emotional nowadays responding to the non-stop news flow. Just as AAPL received a push higher (especially from retail traders caught up in the hype) to attain the $1 trillion valuation last week, traders are abuzz that the SPX will overtake the prior all-time and closing record high at 2872.87 from 1/26/18. The HOD yesterday at 2862 is only 10 points away and the SPX begins the Thursday, 8/9/18, trade at 2858 only 15 points away.

The chart says a top is in place in the daily time frame but investor emotion continues to cheer for a new record high. The Federal Reserve and other sick central bankers are maintaining their jack boots on the throat of volatility to drive stocks higher. The VIX sinks to 10.85 in yesterday's trade with a LOD at 10.52. VIX is currently trading at 10.60 as this message is typed 3 hours before the opening bell. S&P futures are +3 so the bulls are performing their stretching exercises wanting to take the SPX towards the new record high. The bulls are trying to send the VIX below yesterday's low at 10.52 which would create more upside joy.

The PPI inflation data is on tap at 8:30 AM EST and will influence the futures. If the bulls can push either the RSI or MACD line above the highs from late July, the rally will have a few more days of legs before rolling over. If the RSI and MACD remain neggie d as the chart displays, stocks will roll over to the downside targeting 2820-2830 for starters. Watch volatility closely. 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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