Thursday, February 6, 2014

SPX 60-Minute Chart 200 EMA Bear Flag Double Bottom Rising Wedge

The hype over the jobs report reaches a fevers pitch today. Traders are expecting well over 200K jobs for the Monthly Jobs Report tomorrow morning. Markets rally strongly today. The chart updates the bull flag pattern which fell short of the second leg downside target but sometimes that happens; the intent of the pattern played out nonetheless. The first leg was 1850 to, let's call it 1780, 70 handles, then second leg from 1800, so 1730 was the target and the low intraday print was 1737, close enough for government work. Moving on, the price action places a double bottom and the positive divergence (green lines) is firmly in place creating both bounces off the bottoms.

Price is squeezing into a red rising wedge and targets that 1781 resistance level as a firm ceiling; the 20-week MA is 1781.48 which provides further street cred for a test of 1781. The SPX is below the 200 EMA at 1799.57 signaling bearish markets for the hours and days ahead, however, a back kiss of this critical moving average may be in order. Bulls got nothing unless they move the SPX above the 200 EMA.

The indicators remain long and strong so price wants to continue higher unless the jobs report creates negativity. With the 200 EMA sloping lower, and 1796 a resistance level, price may want to test this level if the jobs number causes a continued rally. On the top side, resistance is at 1775, 1781, 1788, 1796, then 1801 and higher. On the downside, support is at 1772, 1768, 1763, 1756, 1744-1745, 1740 and 1737. Watch the 200 EMA since it is a key determinant of the markets fate moving forward.

For now, the bears remain in control since price is under the 200 EMA. If the jobs report was not on tap tomorrow, the chart forecasts higher prices with a rejection at either 1781, 1788 or 1796 and move lower from one of these levels. The 2-hour chart has long and strong indicators so several candlesticks may be needed to roll it over so price can easily head higher well through tomorrow into the weekend, testing the resistance levels, unless the jobs number, or other negative news, creates market mayhem. This information is or 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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