Tuesday, November 12, 2013

SPX 30-Minute Chart 8/34 MA Cross Sideways Channel Overbot Negative Divergence Developing

The thick blue lines show how price is bouncing through the sideways 1745-1775 channel for the last month. Bulls win above 1775. Bears win below 1745. The 8 MA is above the 34 MA signlaing bullish markets for the hours ahead. The chart clearly illustrates the continued bear frustration in the markets. Each time a negative 8/34 cross occurs to signal bearish times ahead, the bulls slap the bears silly, taking their lunch money, and creating the positive cross in quick order (green circles) with the help of Uncle Ben Bernanke's constant pumping of the stock markets as well as his underlings; three Fed heads are on tap today to pump the markets higher and make the wealthy wealthier.

The red lines and arrows show the negative divergence spank downs. Yesterday's action results in far weaker indicators as the day played out, however, price did not match or exceed the HOD at 1773.44 earlier in the day, so technically-speaking, yesterday's action is not negative divergence--yet. The indicators are negatively sloped for yesterday but the price will need to print at 1773.44+ to officially lock in the neggie d. If price climbs higher, watch the thin maroon lines in the right margin to see if the negative divergence remains. At any rate, stochastics are overbot requiring a move lower which will likely be satisfied at the opening bell since the S&P futures are weak this morning. It would not be surprising to see price recover and print inside the red circle where it should top out. The RSI is not overbot so the bulls may try to squeeze out some more upside especially if the Fed is successful in its daily pumping scheme today.

Projection is sideways to sideways lower moving forward. Bears got nothing unless they create a negative 8/34 cross. The 8 MA will not curl to the downside until price drops below 1771.46. The blue lines show key S/R at 1775, 1772, 1763, 1759, 1752, 1745, 1733, 1730, 1722, 1706 and 1697-1698. Note the gap at 1734-1737 which will likely require exploration. Price sits on an island now above 1737 so a potential island reversal may be on tap as price drops towards 1737 again. The gap on the daily chart is 1730-1733 so this 1727-1737 area continues to form a confluence with many technicals and may act as a magnet area to draw price lower. Watch the 8/34 MA cross as a bull-bear guide going forward. 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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