Monday, January 5, 2015

SPX 60-Minute Chart 200 EMA Cross

The SPX is under the 200 EMA on the 60-minute at 2051 signaling bearish markets for the hours and days ahead. Bulls got nothing until they regain the 200 EMA. The indicators are oversold favoring a recovery bounce. The MACD line is still sloping lower so another price low is desired in this one-hour time frame after a recovery move occurs for a candlestick or two. The 2-hour chart also shows a weak and bleak MACD line with the other indicators developing or in possie d (green lines). So price should bottom sometime over the next one to six hours. This places markets at the closing bell so just say that a bottom should be placed anytime now through early tomorrow morning. The CPC was above 1.20 (reference the chart on the weekend) indicating a near-term bottom and with the flush lower in stocks today the CPC will jump even higher (more fear), so a near-term bottom would jive with the 1-hour and 2-hour charts setting up for a bounce in a few hours time.

When the SPX bounces either late today or tomorrow morning watch to see if it can overtake the 200 EMA, or not. If price goes up for a test but cannot overcome the 200 EMA and fails, serious market carnage would begin. Since price is on an island above the gap at 2020 that may serve as the near-term bottom. If price fails down through the gap that would be an island reversal pattern.

From this morning's SPX S/R article, the strongest S/R is 2057, 2054, 2040, 2038, 2032, 2024, 2018, 2011 and 2002-2003.The SPX is dropping to session lows as this is typed testing the 2024-2025 support. If that fails, then the 2018-2020 is next. A failure at 2018-2020 and price will be at 2011 in a heartbeat.

The Keybot the Quant algorithm is bearish having flipped short after the opening bell and is tracking XLF 24.27 to see if further market carnage is on tap. XLF just lost 24.27 minutes ago. See if the failure holds, if so, markets are going to go down hard. Markets will recover only if XLF moves above 24.27. Markets are toast if XLF remains under 24.27. 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 1:42 PM: The XLF failure at 24.27 creates the market negativity in the early afternoon. If XLF regains 24.27 stocks will stabilize and recover. If XLF stays under 24.27 then the bears are going to keep causing mayhem. If SOX loses 671.80, a large leg lower will occur for stocks. SOX is currently helping the bulls at 674. XLF is at 24.24 dancing along the important 24.27 bull-bear line so simply use this as the market guide. Bulls win above XLF 24.27; bears win below XLF 24.27. The SPX LOD is 2019.28 so the 2018-2020 support at the top of the gap is holding, so far. If XLF recovers above 24.27, then the SPX will move above 2024 resistance and seek 2032. If XLF leaks lower, SPX  will seek 2011 support.

Note Added 9:25 AM on Tuesday, 1/6/15: The SPX ended at the 2020 level. XLF is under 24.27 continuing the mayhem.

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