SPX 30-Minute Chart 8/34 MA Cross Potential H&S

The bears are not allowed to shine. The 8 MA crossed under the 34 MA to signal bearish markets ahead but on the Independence Day holiday the BOE and ECB central bankers fired the money bazooka's and the SPX ran from 1605 to 1680 on one week's time. The CB's sure know how to pump.  The 8 crossed under the 34 again signaling market trouble on 7/16/13 but the semi-annual Fed Congressional Testimony was on tap and markets are always bullish in this period, and, as Chairman Bernanke pumped the QE Infinity talk, the markets recover again from 1670 to one-point shy of the psychological 1700, in a few short days. The bulls have the easy road this year since the Fed's central mandate is to keep the stock market elevated at all costs. The Fed's main hope is to continue buying time. The longer they can keep things afloat, the better the chances that the economy may pick-up and recover. Alas, even the lowered expectations for earnings are not providing impressive results verifying the sick, slow-growth economy. The central bankers are the markets.

The red rising wedge, overbot conditions and negative divergence created the smack down off the top but the move lower was short-lived once again.  Volatility is crushed lower over the last week to create further market buoyancy and the 8 MA moved above the 34 MA late Friday to signal bullish markets for the hours and days ahead. The indicators are long and strong in this time frame so a run to 1700+ is back on the table for the next 3 to 6 candlesticks, maybe more, which is 2 to 3 hours, let's call it Monday lunch time or afternoon. At that time negative divergence would be expected again. The blue lines show an H&S under development that is printing the right shoulder right now. Of course if price moves above 1700 the pattern is nullified although any print above 1700 would serve as a new head for a potential H&S. If 1672 fails, the low 1640's are targeted. The small blue circles show gaps that will likely need filled. The price action on Friday came down for the low which filled the gap from 7/17/13.

Note how the stochastics were the only indicator that was oversold on Friday, another cheesy bottom as many have been recently, the markets are never allowed to correct properly. For now the bulls want to run higher with the 8/34 positive cross on their side. Bears need to sharply drop markets to reverse the 8/34 cross. Any smidge of green in the futures overnight will likely point to SPX 1700+ on Monday. 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.