Tuesday, July 9, 2013

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

Here is a continued look at the red rising wedge we started to watch yesterday. Scroll back to study that chart. The idea was to attain a higher print in price above yesterday's opening prints at 1645-ish. Late yesterday the markets drifted out sideways looking like they ran out of gas but the bulls ate their Wheaties this morning and show up to jam markets higher. This morning's print tags the top trend line for the wedge at 1649-ish. The 1649-1650 level is very strong support, also 1653. So the 1649-1653 can be treated as an important resistance gauntlet which will lead to the 1660's if the bulls can push up through. Today, a test at 1653 R cannot be ruled out, however, as evidenced by the red lines, the negative divergence is ushering in weakness. The anticipation would be a roll over in price as traders eat their lunchtime sandwich.

 The 8 MA is above the 34 MA so the bulls rule for the hours ahead. The 8 MA is 1642-ish so the bears can only curl the 8 MA to the downside if price drops under 1642. Bears got nothing unless they achieve a negative 8/34 cross. We will see today if price collapses out of the rising wedge. A quickie short against the S&P 500 is an attractive idea right now as price plays around in the apex of the wedge. The 2-hour and 1-hour charts leave the door open for some additional buoyancy so the bulls may be able to hold on into the afternoon but it appears that price should roll over at some point today. 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 11:42 AM:  The SPX is printing 1651 continuing to play in the apex of the red rising wedge as sandwich time approaches on the East Coast.
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8 comments:

  1. AnonymousJuly 9, 2013 at 10:40 AM

    For bulls it's pretty simple: if 1654 or more is reached and held for about 10 minutes one of the most bearish scenarios disappears and new highs in the 1700's are on deck for the following days and weeks (in July or August).
    It's really simple.
    :)

    V.

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    Replies
    1. Keystone SpeculatorJuly 9, 2013 at 10:48 AM

      That sounds like a good projection V. Perhaps the only slight twist would be if 1654 holds for 10 minutes or more, then the SPX is headed to test 1666. Then, if 1666 is violated to the upside, the test of the all-time highs occur at 1669-1687. If the SPX closes above 1680 as this test at 1669-1687 occurs, then the trek to the 1720's is likely. However, bigger picture and overall, it would not be surprising to see the SPX reverse at anytime and these current levels and higher may not be seen for many months perhaps years ahead. The market reversal would be from 1649-1650, 1652-1653 or 1666.

      Delete
    2. AnonymousJuly 9, 2013 at 11:01 AM

      Yes KS, you're right.
      After 1652-1656 area, 1666, 1669-1687 areas are resistence levels.
      But 1654 has a special meaning : in case of the scenario of a still existent int.4 1654 is B (in case int.4 is over) or only 'b' of A (assuming that A finished at 1560).

      Breaking through 1654 significantly reduces the chances of the scenario where 1654 is just 'b' of A (a more bearish scenario that might lead to the area 1505-1515 where 200DMA will be in 1-3 weeks).

      Technically speaking yes, 1654, 1666 and 1687 are equal important R levels. But 1654 is pretty significant.

      Yes, KS, you are mega-right... those levels are quite rare and may not be seen for some time. This is not the time to start a long position...although starting a short here, if 1654 breaks to the upside, would be a not so happy idea.

      Thank you KS.

      V.

      Delete
    3. Keystone SpeculatorJuly 9, 2013 at 11:21 AM

      Looks like the entire 1649-1656 zone is an important resistance area mixing all the analyses together. Like Custer's Last Stand only we do not know if Custer is the bull or the bear. Price is at 1650 right now. Today will be interesting.

      Delete
    4. AnonymousJuly 9, 2013 at 11:31 AM

      ''Today will be interesting.''

      Yes indeed :).

      V.

      Delete
  2. AnonymousJuly 9, 2013 at 12:52 PM

    Sandwich time is almost over and SPX still hovering at 1651...that's a little worrisome.

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  3. AnonymousJuly 9, 2013 at 12:53 PM

    Hi v n ks.. May I know why 1654 is so important? What is the bearish scenario?

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  4. Keystone SpeculatorJuly 9, 2013 at 1:02 PM

    SPX testing the 1652-1653 resistance. The 30-minute chart is negatively diverged but the 1-hour and 2-hour charts are trying to squeeze some additional life out of the rally. Watch VIX 14.28 as the key element. It is only pennies above now, on the bear side, so the bears remain in biz as long as VIX stays above 14.28. If VIX drops under 14.28, the SPX is going to run to the 1660's. VIX is now at 14.35.

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