Friday, September 20, 2013

SPX 30-Minute Chart 8/34 MA Cross Sideways Channel Descending Triangle

Drilling down for the VST (very short term) using the 30-minute, the green ascending triangles are highlighted that led the way higher for the bulls. The indicators were not enthusiastic about the bull moves but the price jumps occur due to news-driven events. The Monday, 9/16/13, bounce was the Larry Summers rally. Summers had a bad day since the rally shows that no one wanted him for the new Fed head position. Then Chairman Bernanke decides to show up in a toga on Wednesday afternoon creating a wild upside Caligula-style orgy. The 8 remains above the 34 MA on the SPX 30-minute chart signaling bullish markets for the hours ahead, however, price is a smidge under the 8 MA which will start to curl the 8 to the downside for a potential negative 8/34 cross. Market bears got nothing unless they achieve a negative 8/34 cross (pink box).

The price action yesterday creates a new all-time high at 1729.86 but did not create a new closing high. The green ascending triangle made for happy bulls; the potential red descending triangle has the bears interested. Watch the price action today to see if the upper rail of the red triangle holds as a price ceiling, leading to failure at 1720, or not. The brown sideways channel at 1720-1730 is also in play. The market bears would have been better off to see price hit 1730+ yesterday afternoon since this would have locked in strong negative divergence. Note the negative slope for all the indicators (red lines). Negative divergence does not exist, however, since price did not make a matching or higher high (compared to the 1729-1730 earlier in the day). Thus, the brown channel has to remain in play since price may want to come up today to tag the 1729-1732 area. This will likely lock in the neggie d and the downside ahead.

Thus, watch the 8/34 cross. Also the red descending triangle. Bears must hold the top rail at 1724 to keep the pattern in play, and the failure at 1720 would send price to 1710. If price pokes up through 1724, negating the triangle, the brown channel will be in play instead. For this outcome, watch to see if price makes the matching and higher highs at 1729-1732, and if so, note if negative divergence exists for the indicators which would be very likely, indicating a roll over to the downside ahead. Markets may simply stumble out sideways today after such a circus of a week with the Fed. Europe and Germany elections will be important on Sunday and the U.S. politicians will be fighting over the CR bill all next week into a climax of drama next weekend as the month nears an end. Projection is for price to top out in here at 1722-1734 and roll over to the downside. 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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