Monday, December 1, 2014

SPX 30-Minute Chart 8/34 MA Cross Rising Wedge Negative Divergence Gap Potential Island Reversal

The 8 MA remains above the 34 MA on the 30-minute signaling bullish markets for the hours ahead, however, a negative cross may occur this morning as S&P futures are -9. The purple circles show the bulls slapping the bear's in the face time and time again as the bears try to push the 8 MA under the 34 MA but fail. Bears got nothing without the negative 8/34 cross.

There is a fine line between love and hate and there is also a fine line between an ascending triangle pattern and a rising wedge pattern. The green ascending triangle is a bullish pattern with vertical side of about 14 handles so a breakout above 2072 targets 2086. As mentioned on Friday, typically for an ascending triangle you want to see long and strong indicators pointing the way higher so you know the launch is at hand but instead the red lines are negatively diverged wanting price to move lower. The red rising wedge appears which is a bearish pattern topping out on Friday. The stochastics and RSI are weak and bleak wanting to see lower lows and both are now in bear territory (under 50%).

The brown lines show a gap big enough to drive a truck through. Price will either want to fill the gap or an island reversal pattern may occur where price falls to 2057-2058 and then immediately collapses back down through the gap to 2052-2053 and lower. The expectation is lower for the SPX unless the central banker's intervene. Key resistance above is 2070-2071, the all-time closing high at 2073 and all-time high at 2076. Key support is 2067, 2065, 2057 and 2052. The two-hour and one-hour charts favor the bears with firm negative divergence and tight bands hinting at a strong move lower. 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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