Thursday, August 7, 2014

SPX 30-Minute Chart 8/34 MA Cross Tight Bands Squeezing a Move Potential Descending Triangle

The standard deviation bands are squeezing in tight so a big move is imminent, probably 20 or 30 SPX handles one way of the other. Note how price is tapping on the upper trend line of the descending red triangle (a bearish pattern). Price will either pierce up through the red trend line signaling a recovery rally in play, or, receive a spank down from the red trend line and remain inside the triangle. A failure out the bottom base line of the triangle will target 1885 (keeping it simple, the descending triangle base line is 1915-ish; the vertical side is 1945 for a 30-handle difference; thus 1915-30 = 1885).

The tight band squeezes do not predict direction only that a strong move will occur one way or the other. Bulls win big above 1928-1929. Bears win big under 1915-1917. The green lines show the positive divergence bounce where price printed new lows while the indicators were sloping higher. Price bounced off the possie d but without initiative and is actually drifting more sideways with mixed indicators. The 8 MA remains under the 34 MA signaling bearish markets for the hours ahead, however, price is at 1923 above the 8 MA at 1922 which will curl the 8 MA higher for a potential positive cross. Watch the 8/34 cross and most importantly the 1928-1929 bull victory level and 1915-1917 bear victory level. 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 11:03 AM: As the information is typed above, the SPX drifts lower potentially receiving a negative band squeeze. Price is at 1919 inside the safety of the red descending triangle. Watch the limits above to see who wins. Price must decide to exit the triangle one way or the other. Note that if price runs flat sideways across 1918-1925 the drama can continue the whole day today, however, the tight bands say the sharp move will occur sooner rather than later likely over the next hour or two. VIX is above 16. TRIN is 1.48 firmly bearish (above one) favoring the sell side today. The SPX is at 1917 now teasing the lower boundary limit. Dollar/yen 102.15 moving lower indicating a stronger yen which hurts the stock market (less QE easy money to buy stocks).

Note Added 11:10 AM:  SPX is at 1918 after dipping to a LOD at 1916.42. Price just tested the lower base line for the bearish descending triangle pattern at the critical 1915-1917 area and bounced on the first attempt. The lower standard deviation band is 1915.59 so if that level fails, price has probably selected down as the direction for the band squeeze. The drama continues......

Note Added 11:15 AM:  Whoa Nellie....steady... 1915.55 .... 1915.24 ...... it's do it or die bears, if you want it, take it, it is on a silver platter. Bulls must immediately bounce price to save the day, otherwise, the bulls are going to fold like a cheap suit.

Note Added 11:17 AM:  Bounce. SPX 1917. The bulls defend the 1915-1917 line in the sand twice. Can they keep holding the line? VIX 16.20. TRIN 1.35. JJC (copper) is 38.78 remaining bearish as per Keystone's trading algorithm, Keybot the Quant. JJC 38.92 is the bull-bear line in the sand. Market bulls win today and will create a relief rally if JJC moves above 38.92, above 39 and higher. Bears win if they can keep JJC under 38.92 and force the SPX under 1915-1917.

Note Added 11:22 AM: The bulls thrust higher to 1920 laughing at the bear's feeble attempts to take markets lower. The bulls brag that they have the Fed and other central bankers on their side. The direction from the tight band squeeze remains up in the air. This is high drama that will be resolved over the next hour or two. One side is going to be very very happy and the other side is going to be very very sad.

Note Added 11:25 AM:  VIX drops to 15.85 providing bull fuel.

Note Added 7:52 AM on 8/8/14: Global markets are on a roller coaster ride with futures dumping overnight on the threat of US air strikes in northern Iraq then a huge reversal to the upside on news Russia is seeking a peaceful resolution to the Ukraine turmoil. S&P futures were down -15 about five hours ago and are now up +4 about a 20-handle turnaround. Yesterday the bears win out pushing under the base line of the descending triangle so the 1880's are in play. With the recovery in the futures, price may want to simply back kiss the 1915-1917 area to further decide if it wants to bounce, or die.

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