S&P in the twlight zone

I recently realized that the S&P is a better market to analysis for my current interests so look at where it is at currently.  I will say this, it will be an interesting few weeks ahead.

Volume:
It is worth noting that volume on the past 3 day rally has not been above average.  Some inferences can be made about this.  The "big boys" - fund managers etc, have not jumped on the bandwagon just yet.  One interest point is if you look at the up days, around 3pm there is a surge of bullish activity driving up prices.  On one occasion this price action has saved day for the bulls and today it has greatly increased the days gains.  In my non-expert opinion the volume isn't there to support that much of an upside move.   To save room volume isn't on the graph.

Bollinger Bands:

S&P recently bounced nicely off the lower bollinger band and is trading at the middle-low range.  This indicates that the index can go up or down without bollinger band resistance.

Moving averages:
On the 23rd of June, we crossed the 20 day moving average.  All other averages are resistance at this point which means the trend is still quite bearish.  50 day and 200 day are about to cross, DEATH CROSS.  Based on the current slopes July 18-19th could be the cross which is again very bearish.  However, if the market picks up there may be a chance it will be a glancing blow.

Resistance:
Big purple is a strong resistance area, as you can see it has been resistance and support many times recently.  Any break above this line will reduce my ability to continue to be a bear in the short term.  It is entirely possible that S&P 500 rises after breaking that line, and might continue up for a few days/weeks.

Falling Wedge pattern:
http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:chart_patterns:falling_wedge

This is considered a bullish pattern.  As you can see we are possibly in this wedge pattern,  Since i just drew this today, but i am expecting a pull back tomorrow since I don't think we will break that purple line (3 days of gains, it would be hard to justify)  Assuming this wedge pattern holds and we drop a bit down, well, You could short this index and set your stop loss above it.  If you did this it is very low risk trade since you would be out if the breakout of the purple resistance occurs. 
Either way this index breaks it provides an opportunity to get in and setup a decent stop loss position.

Divergence:
This is something i haven't talked about.  When the MACD and / or the RSI diverge from the price trend, that is a possible sign of a reversal.  The fact that we are in a wedge pattern and the MACD is diverging (see green line)  makes me very unsure about what will happen.  However, the RSI isn't diverging (see red line).  If anyone knows which is the more reliable measure it would be helpful, at this point I would say the market is pretty confused about the future.


RSI / Slow Stoch:
These are both measures of overbought and oversold conditions.  Both of these are now neural after being oversold due to the recent break low.   The Stoch has indicated an upward momentum since it came out of the oversold condition.

MACD:

Still bearish but.... the "buy signal" is about to occur. This would again indicate a beginning of an uptrend. 



Plan:

Wait.
If there is a breakout of that wedge either direction that could be the start of a couple week trend, so wait for that to occur to be conservative. 
The reason I am a cautiously bearish right now is because what has changed?  The governments are all in debt to the point where it boggles my mind why other nations continue to purchase their bond issues.  One reason could simply be that they have no choice.  If they pull the plug on bond purchases for Europe/US, the world economy collapses, in addition to that, most countries that are purchasing these bonds have huge cash reserves that will devalue very quickly if their is another sovereign debt crisis. 
There has not been any news recently that has been positive that would confirm growth.  We did today get better than terrible news on job loss claims.  They were better than expectations by a minimal amount but still not very good for a recovering economy.
I will update this post when something significant happens. (could be a break to the upside tomorrow)