Wednesday, July 30, 2014

SPX 30-Minute Chart 8/34 MA Cross

The bears create the negative 8/34 MA cross on the SPX 30-minute chart by only twenty cents at the end of yesterday's session signaling bearish markets for the hours ahead, however, the GDP is a blowout 4.0% and futures are catching a strong bid, so the bulls want to turn the negative cross into a positive 8/34 cross and seize back control. Price pierced the lower standard deviation band at 1972 so a move back to the middle band at 1978 at a minimum would be expected going forward.

The indicators are weak and bleak (red lines) wanting to see lower lows in price after any bounce in price occurs. The stochastics are oversold which will help create the price bounce higher at the opening bell. Key S/R is shown by the brown lines at 1986, 1985, 1980, 1976, 1973, 1968, 1963, 1961 and 1960. Depending on how the price action settles out today a sideways path through 1968-1986 may develop. The FOMC announcement is 2 PM which will impact markets. Watch the 8/34 cross today. Bears are fine if the negative cross remains. If the SPX stays below the 1985-1986 resistance today, the bears could maintain control. If the SPX starts moving above 1985 the bulls are likely going to run to new all-time highs.

Keybot the Quant algo is bearish currently and VIX 12.69 is a major bull-bear line in the sand. As markets rally to begin the day, if VIX stays above 12.69 the bears are fine and markets will weaken and sell off. If the VIX drops under 12.69, the bulls have upside fuel available and markets will continue higher. If both the VIX moves below 12.69, and the SPX moves above 1985, Keybot will likely flip to the long side. Today should be a wild day. 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 12:52 PM:  It is a wild day. Big up move at the opening bell but you saw the VIX above 12.69 and heading higher off the initial lows so you knew that equities would weaken and sell off which they did. VIX is now above the 200-day MA at 13.57 which is extremely bearish. Carnage will result if the VIX stays above 13.57. Reference previous VIX chart to study volatility. The key market bull-bear lines in the sand that are influencing broad market direction are VIX 12.69 and RTH 59.62. Bears need RTH under 59.62 but the bulls are maintaining the retail stocks above with RTH at 59.73. Equities will sell off in force if RTH loses 59.62. The market bulls can recover if the VIX drops under 12.69. If the bulls can simply keep RTH above 59.62 this will stop the downside selling and prevent the bears from making significant headway lower. The 8 MA remains under the 34 MA on the SPX 30-minute signaling bearish markets for the hours ahead, however, the 8 MA is 1968 and price is creeping higher towards 1968 which would curl the 8 MA higher. The Fed statement is 2 PM one hour away so markets are idling waiting for the reading of the tablets brought down from on high. Watch VIX 13.57 and VIX 12.69 and RTH 59.62 to gauge market direction forward.

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