Friday, November 14, 2014

SPX 30-Minute Chart 8/34 MA Cross H&S Pattern Sideways Channel

The bears are never allowed to shine. The negative 8/34 MA cross occurred yesterday placing the bears in charge but the bulls smack them in the face again pushing the 8 MA above the 34 MA signalling bullish markets for the hours ahead. The market bears need to push the SPX lower immediately to create the negative cross again. The SPX needs to drop under 2038 to curl the 8 MA to the downside. If price stays above 2038, the bulls will float markets sideways to sideways higher into the weekend.

The SPX 2-hour chart shows standard deviation bands so tight there is no further room to tighten. Price is about to explode 20 or 30 handles or more say by Tuesday (tight bands do not forecast direction). The chart above shows the red rising wedge and maroon rising wedge, overbot conditions and negative divergence that created the two tops. Price is meandering sideways and the breakout above or below the channel will be important at 2040-ish and 2034-ish, respectively. The pink bars show a head and shoulders pattern in play with head at 2046, neck at, say, 2033, so the 13 difference targets 2020 if the 2033-2034 lower channel line and H&S neck line fails. The 2020 level is an area of congestion so that creates a magnet-affect as well for price.

The important thing above is the 8/34 cross. The bulls are in control. The bears need the negative 8/34 cross or they got nothing. Watch the sideways channel and the 2040 and 2034 limits as your first indication of price committing to a direction. Price is at 2039.32 knocking on the upper rail of the channel at 2040. The SPX will run to 2046 if the 2040 gives way and that may create an upside catalyst. Bears need to hold 2040 and push volatility higher pronto. VIX is 13.64. 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.

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