Friday, March 14, 2014

SPX 1-Hour Chart 200 EMA Cross

The SPX is a hair above the 200 EMA at 1845.08 signaling bullish markets for hours and days ahead. Price collapses down through this critical moving average yesterday but recovered back above by only one thin point. Bulls were in full control of markets to begin the year but the January swoon resulted in the SPX dropping below the 200 EMA which ushered in serious market negativity. The bulls fight back and recovered in early February with price crossing above the 200 EMA signaling bullish markets ahead. The pink circle shows the battle set for today; a cage match to decide the winner. Two will enter but only one will exit. The bulls need to finish the day above the 200 EMA and a fun and relaxed weekend will be ahead free of worry or concern. The bears need to finish the day under the 200 EMA to prove they mean business and to lock-in sustainable downside action for stocks ahead.

Key S/R is 1859, 1848-1849, 1841 and 1828. Watch the 200 EMA at 1845.08 like a hawk. The 20-day MA is 1853.67. Treat the zone between these two important moving averages 1845-1854 as a major battle zone. Bears win big under 1845. Bulls recover above 1854. One side or the other will be chosen as the winner moving forward depending on the 200 EMA 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.

Note Added 3:38 AM on 3/15/14: Bears win. The SPX closes the week out at 1841.13. The 200 EMA on the 60-minute is 1845.10. This is a serious, and negative, market development that leads to sustainable market downside. As always, when critical support and resistance lines are crossed, price may kick back to negate the move. Therefore, bulls have to show up with their game face come Monday morning and push price back above the 200 EMA. If the days move along, Monday, Tuesday, Wednesday, and the SPX remains under the 200 EMA, then a trip down to 1828 and 1800 is very likely in the cards. The big spike in the VIX creates the weakness in stocks. Monitor the 200-day MA on the VIX; as long as volatility stays above, the markets will sell off. The Crimea vote on Sunday is a done deal with the succession approved. The question is if Russia annexes the region immediately, or, decides to wait a few days. Also, will the Crimea referendum vote count be available Sunday? Everyone knows the outcome but the vote count would be needed to make it official. Then the biggie. The sanctions. This announcement sometime Monday by the West and G7 will move markets. Keystone bot PBR and EUO into the close yesterday. PBR is bludgeoned lower but starting to base with positive divergence so it may experience a quick pop, then will likely need more time to base, but for the weeks and months ahead, PBR should print higher. A drop to 8 cannot be ruled out, now at 10.37, but under this scenario would add more. EUO is the inverse ETF against the euro ($XEU). EUO moves higher if the euro moves lower. The euro is teasing 1.40 and does remain strong. Traders have been trying to short the euro for the last month only to become frustrated. Draghi is talking more dovishly and may start a QE-type program, or at least try to talk down the euro. Deflation is biting and he needs to weaken the euro so the manufacturing and export companies in Europe can compete and gain global business and create a recovery. The US dollar ($USD) price is tumbling lower inside a falling wedge and should base and reverse to the upside going forward as the weeks play out. The higher dollar would place further pressure on commodities and push the euro lower. The dollar has moved sideways through 79-84 for over two years time. USD is 79.44 testing the bottom support area again.

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