Saturday, May 11, 2013

SPX 30-Minute Chart 8 and 34 MA Cross H&S Pattern

The bears were happy when the 8/34 cross occurred on Friday morning projecting bearish markets for the hours ahead, however, note how the late-day bull run curled the 8 MA back to the upside and sets up a potential bullish 8/34 cross for the opening bell on Monday. This would place the bulls back in the driver's seat. The Monday open is very important. To prevent the 8 MA from crossing up through the 34 MA, the bears must start the week out on a sour note and drop the SPX several handles from the get-go. This would cause the 8 MA to weaken again, head lower, and remain under the 34 MA keeping the bears in control. Perhaps global events or news will supply the bear fuel, or not.  Copper is very important and the Sunday overnight trade in this metal will likely send the broad indexes in the same direction. The market bulls will push higher with all their might since once the 8 MA crosses above the 34 MA, the bulls will light cigars and pour wine to celebrate.

The red lines show the negative divergence spank down on Thursday and Friday. The green lines show a long and strong profile which hints at further buoyancy for about 2 to 4 candlesticks, which would be 1 to 2 hours of trading time, placing the markets at lunch time on Monday. At that time, the negative divergence should reemerge in the shorter term duration of a day or two, and cause price to roll over. Bulls can press higher; the importance of market direction at the opening bell cannot be understated. The blue lines show an H&S pattern in play with head at 1635, neck line at 1626, so target is 1617 but call it the 1614-1618 support zone. If this support fails, a test of 1597-1598 is next.  Watch the 8/34 MA cross during the first one-half hour of trading on Monday since it will tell you a lot about the path forward for markets. 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.

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.