SPX S&P 500 Daily Chart; Overbot; Rising Wedge; Negative Divergence Developing; Upper Band Violation; Price Extended

The SPX 2-hour chart knocked price lower to end last week as explained previously. As September begins tomorrow, today is the Labor Day holiday with US markets closed, the daily chart likely wants to see a matching price high due to the long and strong RSI. Typically, new money enters the market when a month begins which creates buoyancy.

The red lines show negative divergence with the MACD line (although it has a touch more juice over the last day), stochastics and money flow. The RSI and stoch's are overbot agreeable to a pullback. Ditto the rising wedge pattern. Ditto the price extended above the moving average ribbon (price above the 20 above the 50 above the 100 above the 150 above the 200) needing a mean reversion. Ditto the SPX violating the upper standard deviation band so the middle band at 2862, which is also the 20 MA, and rising, is on the table.

Remember the low CPC and CPCE put/call ratios would still like to extract a pound of flesh from the S&P 500 so that will likely play out as soon as the RSI goes neggie d.

2-1/2 weeks ago, stocks were trending lower and beginning to fall apart. The Whitehouse watches the markets like a hawk so they intervened with jawboning proclaiming that the US and China trade talks are resuming and bingo, instant rally. The wealthy must protect their money at all costs. The purple circle shows the intraday bottom that the news created with the long tail on the candlestick. Then the blue circle shows Fed Chair Powell's dovishness at Jackson Hole where he said inflation is not an issue and the December hike became more of a question mark (the September rate hike to be announced at the conclusion of the two-day policy meeting on 9/26 is a done deal).

The central bankers are the market for the last 10 years protecting the privileged class that own large stock portfolios. Now the Whitehouse is flexing its muscles jawboning stocks higher if equities ever threaten to falter.

The brown circles for the trading volume candlesticks show the distribution days occurring over the last four months; the smart money handing off shares to Joe Sixpack that is caught up in the stock market euphoria. The ADX was verifying the strong trend higher in the stock market into this year but by early March this petered out. Note that despite the long rally higher from April, the ADX is subdued down at 15-ish indicating that the rally is NOT a strong trend. Tell that to price, however. The Whitehouse and Federal Reserve continue boosting stocks higher with their words of joy. Charts then adjust.

Due to the long and strong RSI, the SPX likely wants to come back up for a look at the highs from last Wednesday. At that time, the RSI will likely print lower locking in the negative divergence which should roll the index over to the downside. There are many gaps left behind that will need filled going forward. The new moon peaks for the month on Sunday so stocks will likely favor the bears from Friday into Monday the 10th. The Monthly Jobs Report is on Friday which will surely create wildness in the stock market. 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.