Tuesday, August 12, 2014

SPX Daily Chart

Lots going on technically with the price action. We watched the top form with the rising wedge, overbot conditions and neggie d, looking for the smack down, which occurred. The purple arrows show the tight standard deviation band squeezes with the bulls winning in May and bears winning over the last month. Price was dropping into the falling wedge until that low intraday print on Friday morning (the thin red candlestick shadow line). The markets rallied on Russian happy talk but technically the chart was not set up for the bounce. The indicators are weak and bleak going into that low SPX price print, except for a tiny hair of possie d for the ADX, so the news created the rally, then the short-covering turned the rally into an orgy of upside into today. The indicators, however, are not satisfied and would like to see lower lows for price.

The SPX bounced off the 100-day MA at 1915-ish so pay attention to this moving average since it carries strong street cred going forward (a drop through the 100-day MA means lots of downside ahead). The 20-day MA is about to cross down through the 50-day MA which is bearish. The falling wedge points to the 200-day MA at 1887. The bulls would have been better off to allow price to drop to the 1880's and then bounce since the chart would have likely set up positively for a more sustainable recovery rally. The 200 EMA on the SPX 60-minute chart at 1949.62 a very important bull-bear line in the sand. The SPX is under the 200 EMA on the 60-minute signaling bearish markets for the hours and days ahead.

The ADX is 30 and above the mid-20's showing a strong trend lower in place for the SPX price. The volume for the two upside days is not impressive. Yesterday's candlestick finishes in the lower half off the intraday high which is bearish. Note the doji candlestick that marked the exact market top in July. The brown lines show the key SPX S/R levels at 1991 (all-time high), 1988, 1985-1986, 1976, 1973, 1968, 1963, 1960-1961, 1949-1950, 1950 (200 EMA on the 60-minute), 1945, 1931 (August started here), 1924, 1912, 1902, 1897, 1891, 1884, 1878, 1872-1874, 1848 and 1841. Using the S/R levels, bulls win above 1949-1950; bears win below 1924. The fight continues through 1924-1951This 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.

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