Friday, April 25, 2014

SPX 60-Minute Chart 200 EMA Cross Downward-Sloping Channel

The 8 MA is under the 34 MA on the SPX 30-minute chart signaling bearish markets for the hours ahead (scroll back a couple messages to study that chart). The SPX is above the 200 EMA on the 60-minute at 1860.34 signaling bullish markets for the hours and days ahead, thus, bears need to push price under 1860.34 to pop the champagne corks. Marry the 1860 level with the confluence of support at 1858-1859 on the daily chart and the 1858-1860 level now takes on huge importance. In addition, the critical 20-day MA is 1862-1863. If the 20-day MA fails the 1858-1860 support will likely fail. Bulls are fine above 1860-1863. Bears win and will growl strongly if 1858-1860 fails.

Note the W pattern bottom that targeted 1875 which was easily attained. The red rising wedge and negative divergence creates the top and spank down three days ago. Price is making lower lows and lower highs in this time frame so watch to see if the downward channel is maintained. The indicators are weak and bleak indicating a preference to see price move lower for a few candlesticks which would be for a few hours time. It appears that it may be fate for price to test 1858-1860 support, or more broadly 1858-1863 support, where a critical bounce or die market decision will be made. The SPX is currently printing 1866.98 at the lows of the day with a LOD at 1866.94.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 6:46 AM on 4/26/14: The SPX ends the week at 1863.40 and the 200 EMA on the 60-minute is 1860.48. The 20-day MA is 1862.39. So the bulls manage to close above these two critical support levels to receive a feather for their caps.

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