Thursday, June 27, 2013

SPX 60-Minute Chart 200 EMA Cross C&H Inverted H&S

The SPX remains below the 200 EMA at 1619.65 signaling bearish markets for the hours and days ahead while the other sister market turn signal, the 8/34 MA cross on the SPX 30-minute chart shows the 8 above the 34 signaling bullish markets for the hours ahead. Even these two indicators cannot agree on the current market direction just like many other indicators, signals and asset relationships these days. Markets are indecisive. There are 7 crosses of the 200 EMA in recent days further illustrating the ongoing bull-bear tug-o-war. The 200 EMA is key since it either confirms the 8/34 cross for bullishness ahead, or not, and if not will end up creating a negative 8/34 cross on the 30-minute. After the gap-down failure through the 200 EMA on 6/19/13, price has never returned for a back kiss. Perhaps that will occur today. There is a lot riding on this potential back test at 1619-1620 since it will create a bounce or die scenario. If the SPX moves up through the 200 EMA the 1630's and 1640's should follow. If the 200 EMA holds, the markets will reverse and likely accelerate lower.

The blue lines show the C&H with break out line at 1588 which targets 1616. The brown lines show the inverted H&S with break out line at 1598-ish that targets 1636-ish. The H&S is in play now since the 1600 level gave way yesterday. This places pressure on today's action since another close above 1600 will hint at further upside buoyancy. The 1609, 1614 and 1618 are all strong resistance levels. The indicators are not particularly enthusiastic for the upside with negative divergence forming. The MACD line and money flow are long and strong wanting a higher price which is in keeping with the S&P futures now +9 but the indicators should line up with negative divergence across the board as a few hours play out. The RSI is not overbot either. Looks like a test of the 1609-1620 resistance zone will occur today. Watch the 200 EMA. 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 4:15 PM:  The SPX comes up to test the 200 EMA today at 1619-1620 and is rejected closing at 1613. The C&H pattern described above played out and price was sticky today at 1616. The inverted H&S remains in play with the 1636 target unless bears push the SPX down through 1598-1600.

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