Thursday, September 11, 2014

SPX 30-Minute Chart 8/34 MA Cross

At 2 PM Thursday, 9/11/14, the bulls punch the bears in the face with the 8 MA crossing above the 34 MA signaling bullish markets for the hours ahead (green circle). The tight standard deviation bands are squeezing out a big move that appears to be up already bouncing from the 1990-1991 support to 1998. Price has already tagged the upper band so if the bears want to make a stand and stop the upside they need to come to play immediately from the opening bell on Friday. The histogram and stochasics want to see weakness for a candlestick or two (30 minutes or one hour) but then the green lines for the RSI, MACD line and money flow want to see higher highs, thus, the chart is set up well for the bulls to squeeze out some upside juice.

The key S/R is 2011, 2007, 2005, 2002-2003, 1998, 1995, 1990-1991, 1988 and 1985-1986. Price is  held in check late day today at the 1998 resistance. Considering the neggie d on the histogram, the 2002-2003 area may serve as a topside target for price. That would provide time for the other indicators to negatively diverge, however, if the RSI keeps moving higher and into the overbot area above 70, the SPX will be moving higher to 2005 and 2007.

The bulls are in the driver's seat in the VST. Bears got nothing without the negative 8/34 cross so price will need to print at 1994 and lower to curl the 8 MA downwards. Bears will need negative geopolitical news overnight to create a sour mood, otherwise, the bulls appear ready to move above 1998 R, then attack 2002-2003 R to contemplate a move to 2005 R.

VIX 12.35, identified by the Keybot the Quant algo remains key to market direction. Overall, market bears are fine as long as the VIX remains above 12.35. If the VIX drops under 12.35, the SPX is going to explode higher to the all-time highs again and Keybot will likely flip long. If the markets rally higher but the VIX remains bearish above 12.35, the bulls got nothing and markets will reverse off the highs and begin selling off in earnest again. 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 Saturday 9/13/14: The bears came to play on Friday smacking the markets lower with the higher volatility. VIX jumped above 14 but retreated to 13.31 at the closing bell so the bears need to push VIX above 13.56 (200-day MA) on Monday to receive more downside juice. The bears sent price lower in concert with the new sanctions against Russia and the non-stop move higher with the US dollar that is hammering commodities, oil and gold. The 10-year yield sneaks above 2.60% but financials did not run higher. Utilities are beaten with the higher yields. For the 30-minute chart above, the 8 MA crossed down through the 34 MA signaling bearish markets for the hours ahead. The tight standard deviation band squeeze highlighted in the chart above quickly reversed the up move that was at the top band and squeezed the price move strongly lower from 1997 to 1980 a squeeze lower of 17 handles. The last hour of trading sent markets up as the indicators on the chart developed positive divergence with the low in price at 3 PM EST. The RSI never reached oversold territory. Note how the SPX violated the 200 EMA on the 60-minute chart at 1982.80 which would guarantee lower equities but price recovered to 1985.54 at the closing bell keeping the bulls in this driver's seat with this critical 200 EMA cross signal on the 60-minute. Pay attention to the 1983-ish level for the 200 EMA as a key market metric for next week. Very bad things will happen to the stock market if SPX loses the 1980-1983 area. Market bulls will be able to recover and push stocks higher if they can maintain price above 1983. Note how price parked itself directly on the strong 1985-1986 S/R as identified in Keystone's SPX S/R missive last weekend. There is an air pocket to 1973 support so since the 1985-1986 was violated, the door is open to 1973. If the 200 EMA on the 60-minute fails, the SPX will be at 1973 in a heartbeat and that will fail with price moving to 1968 and 1963 support levels.

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