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

Stocks sink on inflation concerns and the FedEx dire call on the global economy going forward. Everyone is throwing the baby out with the bathwater, and now throwing out the sink. Timmy Trader, new to the volatility, jumped out the window no longer able to handle client concerns. Fortunately, he was on the ground floor. The punch to the face was sharp this week from the top standard deviation band to the bottom band and now the middle band at 3981 is on the table.

The new 2-hour candlestick just started at 10 AM EST, and another will begin at 12 noon, then another at 2 PM EST. The 2-hour chart is in universal positive divergence so a bounce should be on tap in this 2-hour time frame. The relief move higher for stocks should start anytime.

The Keybot the Quant trading algorithm remains short and is tracking UTIL 1020 as a bull/bear line in the sand. As a relief move occurs as per the possie d, the rally will have legs if UTIL moves above 1020. If stocks rally today, but UTIL does not move above 1020, equities will likely weaken again and roll over lower again.

The only caveat is if negative news occurs which will create sogginess and the possie d will need a few hours to set up again. If positive new hits the wires, that will kick-in the possie d and provide an extra boost higher alongside the possie d. 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 10:18 AM: Look at that. As the windbag comments above were typed, utes rally and UTIL is at 1018 off the 1020.19 high 3 minutes ago. 1018 at 10:18; that's cool. Will it be 1021 at 10:21? Bulls are knocking at the UTIL 1020 door. Can they get above to signal an end to the stock market selling?

Note Added 10:23 AM: UTIL drops to 1015. SPX 3857. LOD 3837..

Note Added 10:36 AM: UTIL 1017. SPX 3873. LOD 3837. The possie d lifts the SPX 36 points off the bottom so far but the bulls need UTIL 1020 to prove that they got legs.

Note Added Saturday Morning, 9/17/22: Stocks stage an intraday comeback but it should have been stronger. What happened? Just as markets were pricing-in and moving on from the FedEx news bomb here comes General Electric. GE warns of a global slowdown maintaining the sogginess in the stock market. The SPX loses 28 points, -0.7%.to 3873. LOD 3837. HOD 3881. If you bring up the 2-hour chart, you can clearly see the positive divergence lift-off in progress in the 2-hour time frame. The daily chart is fully agreeable to a ST rally for stocks since the chart indicators are all possie d except for the MACD line. Thus, the rally will be in the hourly time frame and will perhaps be short-lived, say Monday and maybe Tuesday. This makes sense since stocks are typically up the day or two in front of a Fed meeting 80% of the time (FOMC rate decision is Wednesday). The daily chart wants one more low due to the MACD so stocks will likely roll over again in the daily time frame and place a more substantive low next week and begin a rally in the daily time frame (when all indicators are possie d). The SPX loses -5% this week printing an outside reversal week for the candlesticks pointing to bad stuff ahead on a longer term basis (but not necessarily near-term). As for the utilities, the bulls tried early in the day to kick-start the rally but UTIL faded after the GE news. UTIL is at 1012 below the 1020 bull/bear line in the sand called out by the Keybot the Quant algorithm. Guess what? The 1020 is meaningless now and for all of next week the new number is 981. Clearly, UTIL at 1012 is above 981 so utes will jump onto the bull bandwagon on Monday morning reinforcing the move higher expected in the stock market due to the possie d on the 2-hour.

Note Added Monday Morning, 9/19/22, at 5:50 AM EST: Thwack. S&P futures were up about +10 Sunday evening when President Biden's words from a 60 Minutes interview hit the tape. Alzheimer's Joe basically says that the US will go to war with China if they invade Taiwan. Bloop. Futures fall out of bed turning negative and dropping further overnight to -40. Sleepy Joe sinks the S&P futures 50 points on his Taiwan comments. The Whitehouse says policy has not changed. Global traders await more comments on the matter.