Thursday, September 19, 2013

SPX 30-Minute Chart 8/34 MA Cross Upward-Sloping Channel

One interesting aspect from yesterday was the verification of the importance of the 8/34 MA cross on the 30-minute. The 8 is above the 34 signaling bullish markets for the hours ahead. Moving into the 2PM Fed decision, the 8 MA crossed under the 34 MA by pennies. The only way to prevent the negative cross is a strong upward market move that would spike the 8 MA higher, and, lo and behold, the Fed delivered. It is easy to see the frustration on the bear side play out chart-wise above with the 8 teasing the 34 last Thursday and Friday, only to see the bulls win out Monday morning on the Larry Summers rally. Then yesterday, as the 8/34 negative cross occurs, the Fed and bulls clutch the brass ring from the bear's paw again.  The 8 MA is above the 34 MA for about two weeks, typically a long time especially considering the market action this summer.

Price obeyed the upper rail of the upward-sloping channel dropping back after an initial touch. The indicators are a mixed bag. Stochastics are overbot and negatively diverged. Money flow is weak. Price should play around through 1722-1733 as the indicators top out. A few hours is likely needed, as the 2-hour chart shows, to absorb the upside energy. Bears got nothing until the negative 8/34 cross occurs. 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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