SPX S&P 500 2-Hour Chart; Overbot; Negative Divergence Developing; Upper Band Violation

The bulls are in charge as the new week of trading begins the second week of September. This is truly when the professional traders come back to work and trading volumes increase. Many were still goofing off to finish the summer last week. The SPX 2-hour is topping out with the overbot conditions and neggie d. The negative divergence is not yet a done deal as shown by the long and strong money flow so it wants one more price high. MFI should roll over with neggie d within the next couple hours (another candlestick). If so, that will place the top in this near-term time frame (hourly).

Looking at the SPX daily chart, the RSI is trying to sneak out higher and the MACD line is long and strong, however, the histogram, stochastics and money flow are neggie d. This hints that the daily chart wants to see a higher high in the SPX in the days ahead (this week). Thus, the topping out of the 2-hour may lead to weakness but it may only last a few of the 2-hour candlesticks, say 4 to 12 hours, which would place a near-term bottom tomorrow or Wednesday. Then the SPX may want to bounce again to satisfy the long and strong MACD line on the daily chart.

The ECB is expected to coo dovishly on Thursday morning; King Draghi will be talking at his press conference before the US opening bell. There is high expectations that Mario will fly above the adoring crowd flapping his dovish wings and dropping euro's (stimulus) to the soft-ball journalists below. Perhaps stocks rally into the ECB decision as bullish traders whip each other into a happy euphoric frenzy expecting big-time dovishness so that would be Wednesday afternoon stateside.

All bets are off for Draghi, however, since he has to walk a tightrope that is thin as a piece of thread. He needs to leave some dovishness on the table for when Madame Lagarde takes control of the European Central Bank so he may disappoint on Thursday morning. It's a crap-shoot.

Thursday may be a candidate for the SPX daily chart indicators to all go neggie d and create a stock market top in the daily time frame. For now, especially for day traders, the S&P 500 will likely top out over the next couple hours or so. The upper band is violated so the middle band at 2949 and rising is on the table. Watch the money flow above for when it curls over and goes neggie d with price printing a matching or higher high; that will tell you the top is in for the near-term (hours).

Thus, if a day trader, consider bringing on index shorts today when the TICK hits +1000 or higher. All indicators must be universally negatively diverged for the top to be in on this hourly near-term basis. 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.