SPX S&P 500 2-Hour Chart; Overbot; Negative Divergence Developing; 2-Leg Bull Flag Pattern Satisfied

Here's a look at the SPX 2-hour chart previously described. You can see the matching price high so the chart indicators can be assessed for potential negative divergence. The thin black line shows that when price makes the matching or higher high, the RSI, histogram, stochastics and money flow are neggie d wanting to see price receive a spankdown. In addition, the RSI is basically at the overbot level, and stochastics are overbot, both agreeable to a pullback. The chart is also neggie d for the month of May except for the MACD line.

Price needs to come up once more since she did not top off properly. The blue lines show price coming up and at that time, the MACD will likely roll over and slope down (neggie d) and the top can be called on the 2-hour.

Friday was set up for the top and price would have likely came back up for the matching high in the afternoon to seal the deal but the debt ceiling talks stall so stocks drop and remain soggy during the session and the MACD line remains long and strong.

If there is happy talk on the debt ceiling come Monday morning, that will provide the matching or higher price high and you can look at the MACD to see if it joins the other indicators in negative divergence and if so, you can call the top in the 2-hour time frame.

If the debt ceiling talk is negative, price will likely keep heading south and not return higher. The opposite occurred early in the month. Price made the lower low and all the indicators were positively diverged calling the bottom but one day later with price near the lows again, the MACD and money flow weakened again. It was a cheesy bottom that likely needed another few hours to be cast in stone but happy talk and inflation data in the market sent prices higher into the two-leg bull flag pattern.

The green two-leg bull flag pattern was up about 90 points on the first leg so when the second leg started, after the expected sideways to sideways lower consolidation move, at 4115, adding 90, is 4205 target which was achieved so the bull flag pattern was satisfied.

The 2-hour chart needs one more up so the MACD line can go neggie d and the top can be called and this may occur on happy debt ceiling talk. If the debt talk is negative, price will likely continue lower. 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.