Thursday, January 8, 2015

SPX 60-Minute Chart 200 EMA Cross Overbot Negative Divergence Developing

The Monthly Jobs Report is tomorrow morning so markets are a crap-shoot. The bulls push the SPX above the 200 EMA at 2047 signaling bullish markets for the hours and days ahead. Bears need the SPX under 2047 or they got nothing. The 20-day and 50-day MA's are at 2043-2045. Marrying that confluence with the 200 EMA creates a very magnetic 2043-2047 area so price may want to come down for a back test. The red lines on the right hand side of the chart show negative divergence except for the long and strong MACD line that wants another higher high in price after any pullback. The RSI is not overbot so that remains on the table as a possibility. At a minimum, 2 or 3 candlesticks are needed to create neggie d for the MACD so that is 2 or 3 hours of time which takes the stock market into lunch time Friday for any potential top.

The SPX 2-hour chart has long and strong indicators which hints at another 2 to 4 candlesticks which would take equities through tomorrow into Monday for a potential top. Next week is setting up positively. During OpEx week, Monday's are typically up, then a Tuesday low leads to a Wednesday high. Thursday and Friday should be buoyant next week into the holiday weekend. Thus, equities may float higher into Monday then sell off into a Tuesday low then up from there.

The Monthly Jobs Report can send the SPX wildly up or wildly down tomorrow. Flip a coin. Much of the two-day rally is due to the expectation that the ECB will provide QE on 1/22/15. Draghi has stuck his neck out promising to deliver the biggest fireworks party ever seen by man. He better not show up with a couple of sparklers. So the jobs circus will need to play out tomorrow morning and then take it from there. The SPX 2-hour chart wants to see some more highs in price for a few more hours. Watch the 200 EMA at 2047 closely; it is an important bull-bear signal and right now the bulls are winning. 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 Friday Evening: The SPX is back under the 200 EMA at 2047 signaling bearish markets for the hours and days ahead (this fight continues). The SPX ends at 2045 exactly at the moving average confluence at 2043-2047. The NYA is back under the 40-week MA at 10790 signaling a cyclical bear market ahead for weeks and months.

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