Monday, October 13, 2014

SPX 30-Minute Chart 8/34 MA Cross Downward-Sloping Channel

The 8 MA remains under the 34 MA forecasting bearish markets for the hours ahead. The 8 MA is 1922 so the bulls need to push above this level to curl the 8 MA higher to set up a positive 8/34 cross going forward. The indicators are positively diverged in this 30-minute time frame wanting to see a bounce and the S&P futures float steadily higher over the last five hours. The RSI may slip back into oversold territory which will require one to three candlesticks (a couple hours) to set up with positive divergence again. The purple boxes show where price is far below the moving averages requiring a mean reversion.

The green falling wedge and downward-channel lines are in play. So the 30-minute chart is agreeable to seeing a recovery move for price. The SPX 2-hour chart is positively diverged across all indicators over the last two weeks but there is near-term weakness in the MACD line, RSI and histogram. Thus, the 2-hour chart may need 1 to 3 candlesticks (today) to place the bottom. Marrying this with the 30-minute, the guess would be that a recovery move occurs early on but price may venture back down, and perhaps create excitement at the 200-day MA 1905 support but the SPX should bounce in the near-term placing a bottom today and perhaps recovering for a day or three. 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 6:45 PM: The SPX recovers to 1912 but that was quick and did not last. Price fell to assault the 1886-1909 support gauntlet area highlighted in this morning's charts. The 12-month MA at 1893.11 failed, the cliff, so stocks went off the cliff dumping 20 handles in the last one-half hour. The TRIN closes elevated again at 1.43, steady-eddy selling that can continue but considering four straight days above 1.40, a relief move should occur. The SPX chart went down the rabbit hole once the 12-mth MA failed. The 30-minute chart is set up with positive divergence again, like the chart above, after the drubbing. The 1-hour and 2-hour charts are set up or setting up with positive divergence; the market selling does additional damage so price needs time to recover. About 1 to 3 candlesticks are needed for price to stabilize so call it 1 to 6 hours to form a bounce and produce a relief rally so a near-term bottom should occur tomorrow (Tuesday, 10/14/14). The CPC adn CPCE put/call final prints are not yet available. VIX leaps to 24.64 so as mentioned this morning you want to nibble on longs into the selling. Keystone took profits on CLF today exiting that trade and will look to reenter long. Keystone bot MUX and MGPHF; these are LTBH (long term buy and hold) style long positions. Keystone bot DFE a divvy European stock play since traders will probably boost this during a relief rally. As always all trades are speculative and you must perform your own due diligence.

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