Friday, October 24, 2014

SPX 60-Minute Chart 200 EMA Cross Overbot Negative Divergence Tight Bands

The bears were punched in the face this week with the SPX moving above the 200 EMA at 1938.78 signaling bullish markets for the hours and days ahead. Market bears need price under the 200 EMA or they got nothing. The red lines show universal negative divergence with overbot conditions and a rising wedge pattern so a spankdown is needed in this 1-hour time frame. The money flow is already weak and bleak wanting to see lower lows in price after any bounce would occur.

The standard deviation bands are coming in tight ready to squeeze out a big move either a rocket ride higher or a collapse lower. The chart favors the bears for the hours ahead. If bearish on the markets, you cannot have sustainable hope until the SPX loses the 200 EMA at 1938-1939. Bulls remain in full control of markets above 1939. 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 4:50 AM on Saturday, 10/25/14: The SPX continues higher after the minor pullback to 1946. The SPX performs a near 20-handle turnaround intraday Friday as Ebola fears appear to blend into the background. The chart above remains overbot and in negative divergence over the last three days across all indicators. The bulls are trying to squeeze out some further very short term juice (1 to 3 hours) so a near-term top is anticipated for early next week. Bulls are in control with price above the 200 EMA.

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