Thursday, November 14, 2013

SPX 30-Minute Chart 8/34 MA Cross Sideways Channel Breakout Bull Flag

The Yellen dove rally continues this morning with the Nikkei up +2% overnight and the European markets up +1% across the board. The weaker dollar and weaker yen (dollar/yen hits 100 a short time ago) pumps global equity markets higher even though the Eurozone economic data remains weak reflecting a sick Eurozone. The weaker yen and dollar will only serve to keep the euro higher which will continue to hurt Europe. S&P futures are +6 about 4-1/2 hours before the opening bell. The sideways channel through 1745-1775 is in place for the last month, until yesterday. The rally on Yellen's dovish words, received ahead of time by privileged traders, sent the SPX +0.8% higher yesterday. The 8 MA is above the 34 MA signaling bullish markets for the hours ahead. The bears are not allowed to shine this year. The Fed will not permit a market correction to occur. What are they afraid of? Probably that if a correction begins they may lose control of the markets. For now, the Fed's mission is to keep the stock market elevated so their rich friends can become wealthier. 50% of the folks in the U.S. do not own stocks. Note how each negative 8/34 cross is nullified by the bulls within 1 or 2 days. This behavior will reverse but remains a mystery as to when it will reverse. Market bears got nothing unless they receive the negative 8/34 cross.

A bull flag pattern is in play with the first leg from 1747-ish to 1773-ish, 26 points, then the sideways consolidation flag occurs, then the Yellen dove rally pump from 1761-ish that targets 1787. The red lines show negative divergence remaining in place overall for the last month but yesterday's momo creates VST upside strength. The RSI is now in overbot territory. The momo will likely need today to burn off so prices should stay elevated and satisfy the bull flag pattern at 1782-1787, however, the negative divergence should reassert itself in the VST and create weakness moving forward. Of course, since the Fed is the markets, if Yellen waffles on her dovish stance today, that would create market weakness. Watch the 8/34 cross. 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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