Wednesday, July 30, 2014

SPX 60-Minute Chart 200 EMA Cross Downward-Sloping Channel Falling Wedge Oversold Positive Divergence Developing

We watched the neggie d form a couple weeks ago (red lines), with the rising wedge and overbot stochastics all forecasting a spank down, which occured. Price is now dropping into the falling green wedge with oversold stochastics and possie d for the histogram and money flow. The RSI is a toss-up printing a matching low as price dropped but that would be deemed positive divergence. The RSI did not reach oversold territory so that is on the table still yet.

Keystone's two key ST market signals are the 8/34 MA cross on the 30-minute (see previous chart) and the 200 EMA cross on the 60-minute. The SPX failed the 200 EMA at 1966.14 this morning ushering in bearish markets for the hours and days ahead, however, the bulls fight back and now are maintaining price above the 200 EMA signaling bullish markets for the hours and days ahead. Market bulls must send price strongly higher immediately or they are in for some significant pain ahead for days and weeks under 1966.14. Price is perched exactly at the 1966.14. Bounce or die.

Bulls are okay and equities will recover going forward as long as SPX price stays above 1966.14. Market mayhem will begin in earnest if the SPX drops under 1966.14. The indicators hint that even though a recovery bounce should occur, lower lows in price are desired afterwards so the stochastics and MACD line can set up with positive divergence. The Fed statment is only one-half hour away so it is folly to make too much of a guess on direction. Whatever the Fed says is going to send markets wildly one way or the other. Watch the 200 EMA cross at 1966.14 since it tells you who wins, and who loses, moving forward. 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 1:30 PM: SPX 1964.68 falling under the 200 EMA on the 60-minute at 1966.14. VIX 13.83. RTH 59.76 safely above 59.62. TRIN drops to 0.73 which is very bull friendly. Fed statement is on tap in 30 minutes. The insider's are likely receiving the information ahead of time right now. Utilities are collapsing today and will require more attention going forward. Type 'UTIL' in the search box and study previous charts since the weekly closing price for UTIL 15 weeks ago, and the 50-week MA, will become extremely important going forward; utes are an excellent forecasting tool.

Note Added 1:35 PM: SPX 1966.37 above the 200 EMA on the 60-minute at 1966.14. Easy come easy go as the big fight at the 200 EMA continues. Have to wait until after the Fed statement to see where she wants to go. One side is going to be very happy and the other very sad depending on how price pivots from SPX 1966.14.

Note Added 1:42 PM: SPX 1966.01.

Note Added 1:44 PM:  SPX 1967.03. TRIN is 0.73 strongly favoring bulls today so the Arms Index is a big help for the bulls allowing them to keep equities elevated. VIX 13.68. RTH 59.80. The 10-year yield is 2.56%. Dollar/yen 102.92 up one handle over the last day a huge currency move. Stronger dollar thwacks commodities. GTX down -0.6%. Higher yield on 10-year buoys financials, tech and consumer discretionary while hurting utilities, consumer staples and homebuilders. UTIL -1.8%. XHB puking -0.8%.

Note Added 1:56 PM: SPX 1966.60 at the 1966.14 pivot point. Bounce or die. Who will win? The Fed decides who wins.

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