Monday, March 17, 2014

SPX 60-Minute Chart 200 EMA Cross

The SPX is under the 200 EMA at 1845.10 on the 1-hour chart signaling bearish markets for the hours and days ahead, however, the bulls are pumping the futures and will try to send the SPX back above the 200 EMA to retake market directional control. The red lines show the negative divergence spank down. Price is now falling into the green wedge and RSI, histogram and stochastics are positively diverged, and the stochastics are oversold, so this is likely creating the near-term bounce as the S&P futures show +10. There is a tiny gap at 1852-1853 that needs filled. The 1859 level is another resistance level above and also where March began at 1859.45. The year began at 1848.36.

The sideways channel through 1840-1841 is in place for the last six weeks. The 1838-1843 support zone is very strong so it makes sense that price may bounce from this level. Note how the 200 EMA is lining out sideways with the moving averages above and below squeezing in towards the center. This hints that price may favor a sideways pattern going forward. Chair Yellen is at bat on Wednesday afternoon so price may want to play around through 1840-1859 until then. If bulls push up through 1859, then a move to test the strong 1874 R is likely. A price collapse through the 1838-1843 support zone will lock equities in for a more extended and sustainable downside move.

The most important aspect is the 200 EMA cross. Bears must keep SPX under 1845 or they will relinquish control to the bulls. 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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