SPX chart shows a nice spank down yesterday from the rising wedge, overbot conditions and negative divergence (red lines). This should begin further downside, however, the bulls are bouncing the S&P futures as this is written. Any move higher in price should result in continued negative divergence which would bring price lower again. The money flow is weak and bleak wanting lower lows in price. The RSI has not yet placed a lower low than a few days ago; watch the thin red horizontal line shown. If the RSI drops under that will signal bearishness ahead since price will not be down to the same low in price but the indicators will be confirmed bearish.
The upper BB is 1573 so the bulls may try to punch the SPX higher to tag the upper BB today. The BB's are coming in and tightening so a big move is on tap for markets this week. The tightening BB's do not tell you what direction, only that a big move in one direction or the other will occur. The prior tightenings (pink boxes) result in identifying the September-October top, the late December sell-off and the late February selloff. The December selloff was stick-saved by the fiscal cliff resolution. Both of these moves this year were down moves but the bulls quickly reversed price as soon as the lower BB was touched. Thus, when the SPX moves lower in the days ahead, watch the reaction at the lower BB. If they markets are rolling over the lower BB will start to drop and allow price to keep falling. In late February note how the lower BB turned flat and then back upwards ruining the bear's fun. The SPX remains elevated well above the 200-day MA and a reversion lower is needed.
The 20-day MA at 1553.03 likely needs tested. The 50-day MA at 1525.46 as well. The volume on Thursday's SPX move through the all-time closing high was stronger than recent days but only in line with the volume from the 1550-1560 level. Therefore, a move into this range is needed for a test and the range encompasses the 20-day MA. Big excitement is ahead this week. The chart says down ahead but the Fed's money-pumping is strong. 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.
