Wednesday, October 24, 2018

SPX S&P 500 2-Hour Chart; Positive Divergence; Oversold; Falling Wedge; Lower Band Violation

The SPX bounced off the positive divergence but then hit its head on the top rail of the falling wedge pattern and fell back down. This is odd behavior since all indicators were positively diverged; the expectation would be for price to rally there forward. Price comes back down now printing a matching low in price and the indicators remain positively diverged.

The MACD line has a hair of weakness but that would only last an hour or two. It appears time for the S&P 500 to bounce. The only thing that can change things is a negative news bite. The lower standard deviation band is violated so the middle band at 2748 is in play as well as the upper band at 2806. That huge gap at 2740-2750 will need filled at some point. 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.

Note Added Thursday, 10/25/18, at 11:38 AM EST:  The SPX flushed lower into the Wednesday closing bell. The S&P tanked 85 epic points on 10/24/18. That is really something. The positive divergence remains in play. Price dropped to 2656 and now is popping back up 47 points on the day, +1.8%, to 2703. That is comical. Price round-tripped from 2700-ish down to 2656 and then back again. The SPX remains under the 12-month MA at 2743 which spells major trouble for stocks ahead and a cyclical bear market now in play. Bulls need SPX above 2743, otherwise, they got absolutely nothing. The positive divergence pops the SPX 2 candlesticks to begin the Thursday trade. Markets are trading on emotion at this point. The CPC put/call ratio pops to 1.29 verifying panic and fear in the stock market right now. Ditto the VIX that ran above 26 yesterday. These parameters hint that a bottom is near since indiscriminate selling was occurring which usually leads to exhaustion.

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