Friday, August 29, 2014

SPX 30-Minute Chart 8/34 MA Cross Sideways Symmetrical Triangle Tight Squeeze on Standard Deviation Bands

When a month is strong, it tends to finish weaker which occurs with the top on Tuesday and a drift sideways to sideways lower since. Seasonality-wise, the couple days in front of a three-day holiday weekend tend to be bullish. Today is typically about a 70% bullish day. So the bulls may be able to muster up some bullishness into the weekend.

The 8 MA remains below the 34 MA signaling bearish markets for the hours ahead. Bulls got nothing unless the receive the positive 8/34 cross. The 8 MA is at 1997.20 so bears need the SPX below 1997 to keep this moving average moving lower while bulls need the SPX above 1997 to send the 8 MA higher to provide a positive 8/34 cross. The tight standard deviation bands (green) are squeezing in tight for a big move (in this 30-minute candlestick time frame). The blue sideways symmetrical triangle is in play reinforcing the deviation bands also predicting a strong move one way or the other. The vertical side of the triangle is 15 to 17 handles thus, if bulls win with a move above 1998 then 2013-2015 is targeted. If bears win with a move under 1995 then 1978-1980 is targeted. The triangle only has space for one to three more candlesticks so a winner will likely be christened today leading to a happy finish to the week ahead of the holiday for one side at the expense of the other.

Keybot the Quant remains long but almost flipped short yesterday. If the VIX moves above 12.54 today, Keybot will likely flip short. VIX is currently at 12.30. Volatility and copper are dictating market direction currently. Bears win big if VIX moves above 12.54. Bulls win big if JJC moves above 38.79. There should be a big move on tap today unless bulls and bears can line things out dead flat from here delaying the move until Tuesday's opening bell. Equities will travel sideways today with a slight upward bias if VIX remains bullish and JJC remains bearish (which is the current price action in real-time now). This would set up the big move for Tuesday morning (US markets are closed on Monday in Observance of the Labor Day holiday). Markets finished strongly higher the day before the Independence Day holiday only to be bludgeoned when traders returned to work the following week nursing hangovers. The Labor Day holiday may follow similar behavior to the July 4th holiday?

Watch the bull breakout level at 1998-2001 and bear break down level at 1994-1996. The SPX would flush lower if the 1990-1991 support is lost. The SPX will accelerate higher if the all-time high resistance at 2005 is taken out. 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 11:14 AM:  The JJC is 38.37 remaining firmly bearish under the 38.79 bull-bear line in the sand. The VIX is 12.15 retreating lower remaining below the 12.54 bull-bear line in the sand providing upside bull juice. The SPX is at 1999, now 2000, threatening to break out higher as discussed above. The TRIN is 0.87 firmly in the bull camp helping create market buoyancy today. The beat goes on. Watch the HOD at 2001.35 which will open the door to 2005 and the path higher. Bears need to push volatility higher immediately and prevent the SPX 2001 handle from printing.

Note Added 5:53 AM on Saturday, 8/30/14: The bulls slap the bears in the face again, as is typically the case. A late days surge higher finishes the day with the SPX closing at the highs at 2003.37. The 8 MA crossed up through the 34 MA at 11:30 AM only fifteen minutes to one-half hour after the last message placing the bulls in charge of markets for the hours ahead; the fix was in. The pre-holiday bullishness carries the day verifying the 70% bullish seasonality expected for yesterday. Since the surge occurred at the very end of the day to move the bulls up through the 1998-2001 breakout area, the bears have a sliver of a door opening available on Tuesday morning to create negativity with a negative news flow over the weekend. If the geopolitics are stable, the bulls will continue running higher to the 2013-2015 target and at that point the 2020's are likely. The bears can revese the positive thrust higher if they prevent a breach of the all-time high at 2005. If 2005+ prints, the SPX is likely on its way to 2013-2015. JJC ends at 38.34 well below the 38.79 line in the sand continuing to cause market negativity. Bulls need higher copper or they will stall. VIX ends at 11.98, under 12, and well under the 12.54 line in the sand causing market bullishness. Note how the bears made a run in the afternoon pushing VIX all the way up to 12.44; only one more dime and markets would have sold off hard into the weekend, instead, the bears are slapped in the teeth and volatility drops like a stone during the last hour of trading creating the bull fuel for the upbeat bull finish. The newspaper and headline writer's are happy since the SPX 2K printed and this can be hyped all weekend long. The SPX continues the trend higher, however, the bulls will have limited juice unless they can push copper higher.

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