Sunday, September 8, 2013

SPX Daily Chart Sideways Channels

Late last week the bulls and bears are fighting for control resulting in a stumbling sideways move. Friday the SPX traveled over 66 handles, about 4% of its point range, through the 1640-1665 range, a 25-handle range. This behavior is with a VIX at 17-ish. When the VIX moves up over 20 and higher, this wild behavior will appear meek. The case can be made for both sides right now. Bears are happy to see the price rejections yesterday at the 50-day MA at 1665.51 and 20-day MA at 1656.79. The bulls are unable to print above the 20-day MA so use that as a major bull-bear indication early in the new week. The slope of the 150-day MA is a Keystone Cyclical Signal (reference the other pages on this site) and it continues to slope upwards. When this flattens and rolls over, it will indicate a sideways to sideways lower stock market for months to come.

The bulls are happy since the stochastics are long and strong, over the 50% level supplying more upside juice, the money flow is above 50, and the RSI is attempting a move above 50. The bottom one week ago was cheesy with the MACD line never agreeing to the upside move. Note the volume increasing now after the Labor Day holiday. All traders will be at their posts this week with the beach umbrella's and sand buckets already packed away in the back of the garage. The volume remains below average overall. The brown circles highlight the candlesticks with long tails which represent wild intraday price action, just like Friday. Note how all these erratic days correspond to the market highs or lows, and also a couple areas of indecision like late May and late June. This outcome is even mixed since the late May sideways struggle resulted in collapse but the late June sideways struggle resulted in the big orgy up move. Always lurking in the background is the Fed and central bankers, that are the markets, pumping away, and the July 4th area was launched because of the BOE and ECB money bazookas. If the BOJ decides to crush the yen, the dollar/yen will launch and remain above 100 and the stock market will move higher.

The blue lines show a channel in place through 1627-1685, so the move from this range firmly tells you who has won this 4-month sideways struggle. The major S/R is 1691, 1685, 1669, 1652, 1649, 1639, 1627, 1623, 1614 and 1598. If bulls punch up through 1691, then 1700+ is a given and likely the move to the 1720's. If 1627 fails, price will likely drop to test 1598. What does it all mean? A major market decision is occurring. Use the 20-day MA as the decision maker to tell you who wins. 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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