Monday, July 8, 2013

SPX 30-Minute Chart 8 and 34 MA Cross Rising Wedge

The bulls always find a way to win the day, but it is easy when you have rich uncles like Uncle Ben, Uncle Mario, Uncle BOJ and Uncle Carney. The bulls are the uncoordinated weak athlete but will win the game since the rich uncles are greasing palms with plenty of dough.  The bears were making a charge the day or so before the holiday (red circle) but after the Jobs Report on Friday morning, the bears were slapped silly, the 8 MA launched above the 34 MA and the bulls were cruising to the upside once again. Price is favoring a rising wedge moving forward today possibly into early tomorrow morning. Remember, each candle represents 30 minutes of trading time.

Note how all the indicators are sloping negatively (thin red lines) but this is not negative divergence because price needs to move above the prior high at 1644-1645.  There is resistance at 1647 and very strong resistance at 1649-1650. Once price prints above 1644-1645, check to see if the thin red lines remain sloping downwards, if so, that will kick in negative divergence and price should roll over to the downside.  The 8 MA is 1639.45 so as long as price stays under this level it will continue to curl the 8 MA downwards to set up a negative 8/34 cross. However, as this missive is typed, the SPX is now running up towards 1641 so the bulls keep slapping the bears. Look for price to print in the apex of the rising wedge at 1644-1647 and, if the negative divergence remains, will set up a move to the downside. As long as the 8 MA stays above the 34 MA, the bulls rule for the hours ahead. A move up to the 1644-1650 level in this last couple hours of trading today may provide a nice set up for a short trade on the SPX. 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.

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