SPX 30-Minute Chart 8 MA and 34 MA Cross Tight Bollinger Bands Violent Move Coming

Here's one of Keystone's fave charts to watch which is now becoming a regular posting due to the theatrics playing out in the markets right now.  The tight squeeze from the Bollinger Bands jumps out dramatically to any chartist. When the BB's come in tight like now there will be a wildly violent move that will occur with the SPX shooting upwards, or collapsing downwards, and the move is guaranteed to grab your attention. Factoring in the other charts the projection on direction is down although the violent several handle move that will occur can manifest in either direction.

The 8 MA and 34 MA cross soap opera continues.  This cross is typically very clean and easily tells you market dirction for the hours and days ahead.  The sideways action, however, provides no clarity, the SPX bumping along thru the blue channel at 1394-1407 and more specifically, the pink channel at 1399-1406. Note the teal line showing the negative divergence that spanked price down on Tuesday afternoon. The tension mounts as the indicators move out in a sideways vibe; pay attention to the RSI 50% level that you can use as a gauge to announce the winner, bull or bear.

The story is about to be written for the broad indexes. As seen by the uber complacency in the CPC chart, the low VIX, which tends to bottom in August by the way, negative divergence in the charts, and now the tight BB that is about to squeeze out a violent move, this week is about to experience a violent ending.  Projection is a sharp down move.  Perhaps the Housing Starts number in less than two hours can provide a catalyst. Watch the 8 MA and 34 MA since that will clearly identify the winner. The Thursday session begins with the bulls in charge with the 8 MA above the 34 MA. Helmets and seat belts are required moving forward. 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 8/16/12 at 12:30 PM:  The SPX spiked higher at the open thru the upper BB, then collapsed lower to the bottom BB at 1404, then spiked higher which is the squeeze from the tight BB. At this writing, the SPX is over 1413, so the Bollinger Band squeeze-play resulted in a ten handle upside move thus far.  The candles are printing above the upper BB today, a rare occurrence, violating the most remote standard deviations, verifying that the markets are trading in special times currently, and with price action that happens rarely.  Stay vigilent.