SPX S&P 500 Daily Chart; Oversold; Positive Divergence Developing; Lower Band Violation

The S&P 500 daily chart shows the red rising wedge, overbot conditions, upper band violation and negative divergence that Keystone highlighted calling for the top which occurred. Price receives the neggie d spankdown. Remember, the collapses from rising wedges can be quite dramatic. The SPX takes a theatrical drop off its pedestal top as the month began.

The green lines show a lower low in price as the bears continue to bite off chunks of bull flesh. The RSI and stoch's are oversold agreeable to a bounce. Price has violated the lower standard deviation band so the middle band, which is also the 20-day MA, at 2814, and dropping, is on the table going forward.

Price lost the 200-day MA at 2767 and may want to come up for a back kiss and bounce or die decision. The middle band and 20-day MA is dropping so this may come down to form a confluence with the 200-day as perhaps price comes up to meet this confluence; perhaps next week.

The green lines show positive divergence with all the indicators except for the MACD line that remains weak and bleak wanting another matching or lower low in price. With S&P futures down -30 before the Friday morning opening bell, the matching price should print. Thus, watch the purple circle. If the MACD line curls upwards showing possie d as price makes the new low, and the other positive divergences all remain in play, then the bottom is in for the S&P 500 in this daily basis.

Note how price floated higher the last few months but the ADX was under 20 the whole time showing that the uptrend move was NOT a strong trend higher. Stocks float higher on central banker and Whitehorse hype and news bites rather than technicals or fundamentals. Lately, emotion is driving stocks to and fro. The ADX rocket launches to 39 as the SPX collapses verifying that the move lower in the stock market is a strong trend lower.

The negative red Aroon line is in overbot territory so it would be agreeable to seeing a bump higher in price for a few days as it falls from those levels. Thus, the SPX is very near a bottom perhaps today, or early next week. The VIX spiked above 27 this morning and the put/calls are elevated verifying the fear and panic in markets. This behavior would jive with a bottom. Perhaps the Q3 GDP number will shake things up as it is released in the next few minutes. 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.