Thursday, December 4, 2014

SPX 30-Minute Chart 8/34 MA Cross

The 8 MA remains above the 34 MA signaling bullish markets for the hours ahead, however, the SPX is under the 8 MA at 2072 which curls the 8 MA downwards for a potential negative cross with the 34 MA. Bears got nothing without the negative 8/34 cross. Bulls need to push price above 2072 and the initial market weakness will disappear and a rally will resume. Price peaked late yesterday on this 30-minute chart with the negative divergence (maroon lines). Note the MACD cross turns negative a plus for bears. Stochastics move into bear territory under 50. Watch to see if the RSI moves under 50, or not, which will dictate the path forward.

The brown lines show a 'W' pattern bottom to begin December. The W height is about 10 handles so the move from the breakout level at 2060-ish targets 2070 that was easily attained. ECB President Draghi laid an egg today not providing enough dovishness to pump the stock markets higher. Bears cannot be sure of a more extended down move until the RSI drops under 50, the negative 8/34 MA cross occurs and volatility starts moving higher. Bulls need price above 2072 and they will be fine. 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 10:30 AM: The RSI in the chart above slips under 50% into bear territory. The VIX inches higher to 12.77 but bears are going to need a lot higher, above 13 and 14 if they want to create strong selling pressure.

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