Thursday, June 13, 2013

SPX 30-Minute Chart 8 and 34 MA Cross

The 8 MA is under the 34 MA signaling bearish markets for the hours ahead (reference the Short-Term Market Signals page for further study). The green falling wedge provides more detail than the 60-minute chart. The stochastics and histogram are positively diverged as price prints the lower lows at the opening bell creating the current bounce behavior. The RSI never reached oversold territory. Price bounces and plays around at the upper green trend line which is also the 1615 resistance. The brown lines show the critical 1597-1600 support below which would decide the fate of the markets. The green wedge has room to fall which would coincide with a test of the 1597-1600 support either this afternoon or tomorrow.

The chart is agreeable to a couple of outcomes, either a continued bounce off the 1608 support as occurred today (LOD 1608.07), or, a failure through 1608 which will indicate that the test of 1597-1600 is required to settle this bull-bear fight once and for all.  The most important thing on this chart is the 8/34 cross. Bears are cruising as long as the 8 stays under the 34 while the bulls are trying to reverse the negativity. If the SPX stays under 1616, the 8 MA will continue lower. If price moves above 1616, the 8 MA will curl up and provide hope for bulls. 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 7:35 AM on 6/13/13:  The bulls drive the markets higher with a weaker yen (higher dollar/yen) during the day as well as a WSJ article that alluded to further Fed pumping. The 8 Moves above the 34 signaling the bulls back in charge for the hours ahead.


  1. KS,

    From a risk-seeker's perspective, does DXJ look like an interesting Buy at its current price level (around $43.36)?



    1. TW, as always, you have to make your own decisions. DXJ simply moves the same as the NIKK (Nikkei), EWJ, and other plays so it really provides nothing new that other tickers all display. The Nikkei chart is not updated as yet so it does not show today's down leg like the DXJ does. Today's print is a matching low as compared to several days ago, but a bit lower is needed in price so the existence, or not, of positive divergence can be assessed. The Nikkei chart will likely be posted tonight to highlight its bear market. DXJ, NIKK and EWJ can all take a dead-cat bounce in here with some indicators positively diverged but the RSI is not oversold nor the money flow. The weekly chart is sick, very weak and bleak thus, anyone tempted to play the long side of Japan, put on your ballet slippers since you will be doing a twinkle toe dance to take some long profits on a quickie bounce before price is likely squashed again. The 41-42 area may provide an interesting point to consider long, or, if that fails, perhaps 37-39. The 80/20 rule may send it to 38 if 42 fails. If playing Japan long over the coming days stay very nimble and immediately take the profits if they appear.

    2. Watch the Fibonacci retracements since price is respecting these levels. For DXJ, the 38% Fib is 45, the 50% Fib is 42.2 exactly where the bounce occurred, and the 62% Fib is 39.5. The 42-ish level may be an upcoming key test where price either bounces, or dies.

  2. thanks, KS!

    In looking at the USD-JPY, it looks to me that the Yen may make a back kiss around the 98 - 99 level, which could then be an opportunity to short the DXJ.



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