SPX S&P500 2-Hour Chart; Overbot; Negative Divergence

Here is another look at the SPX 2-hour chart. It receives the neggie d spankdown to begin the week and then recovers due to the long and strong MACD on the daily chart. This behavior remains in play and the SPX weekly chart is forecasting a week or few of upside ahead. So any short-term weakness should give way to additional highs. Of course, any bad news out of left field would change the picture and the US monthly Jobs Report is on tap tomorrow morning at 8:30 AM EST.

And speaking of markets that move on soundbites, The dark maroon lines show the negative divergence smackdown that was described in the prior chart. So price is spanked lower and the bears are not even given the satisfaction of tagging the lower standard deviation band before Fed Chairman Powell rides in on his pale green horse to save the day.

King Powell proclaims that the pace or interest rate increases (that stab the economy in the ribs for the sake of lowering inflation) will slow. Bulls trip over each other buying stocks. Look at the two big white candlesticks. Boooiiiinnngg. Price flies higher on King Powell's decree tagging the upper standard deviation band in a heartbeat.

The red lines show negative divergence in play again. That did not take long. The SPX prints two matching price highs at the upper band and the RSI and other indicators are neggie d so she can roll over now if she wants. Price may come up tomorrow morning to the 4100-ish highs again, if so, check the indicators, they will likely all be neggie d and the top is in for the 2-hour time frame. Make sure the RSI would be lower. The RSI and stoch's are overbot agreeable to a pullback.

So the expectation is a top now or tomorrow morning. The SPX should target the middle band at 4009 and a drop to the lower band at 3911 is on the table. The drop may be shallow and short-lived since folks will be anxious to buy and as mentioned above the SPX weekly chart has bullish life ahead.

The SPX went through key levels such as the 10-mth MA at 4058 and 200-day MA at 4048 so it is reasonable to expect back kisses.

The 50-wk MA at 4135 and the critical 12-mth MA at 4155 are overhead resistance. The stock market would catapult higher above 4155.

The 10-mth MA at 4058 is important (see prior chart) so pay attention to the back test at 4058 which should occur over the next days. If price bounces from the 4058 support test,  the higher moving averages at 4135-4155 will be tested as bulls send stocks higher. If price dies below 4058 heading  lower, the stock market will be in serious trouble. The SPX is trading at 4080 as the US session is drawing to a close. The table is set for the drama ahead. 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.