Thursday, January 8, 2015

SPX Daily Chart Two-Day 70-Point Rally

The global central bankers collude to create another relief rally. Traders expect ECB President Draghi to deliver QE on 1/22/15 since it is getting priced into the stock market currently. The Fed appears in no rush to raise rates. Kocherlakota is talking tonight and he is an uber dove so that may serve to pump stocks further. The low on Tuesday is at 1992 so the SPX catapults 70 handles in two days time. That is remarkable. The moving average ribbon shows price respecting the 150-day MA. The two day rally began from the closing price on Tuesday at the 100-day MA support.

The SPX gap-up today is fueled by the central banker euphoria and price fills the gap left behind at 2060-ish. Bears may end up happy that price came up to button up all the loose ends up top. There is now no reason for price to move higher from a gap-fill perspective. The indicators are lining out sideways. The MACD is squeezing in sideways for a major SPX price decision to occur in a couple weeks time and what happens in a couple weeks? ECB decision 1/22/15. Greece elections 1/25/15. FOMC decision 1/28/15.

Thus, equities may line out sideways into the drama expected at the end of the month. If so, price should maintain the sideways channel at 2000-2075. Note the confluence of the 20 and 50 MA's at 2044-ish. At the opening bell today, price popped to 2044 to test this confluence and then the bulls won as price pushed higher. The expectation a couple days ago was for a rally to occur towards SPX 2040-2060 but that was targeted into next week. It occurred in two days!

Tomorrow is the Monthly Jobs Report so anything can happen. The neggie d (red lines) created the spankdown off the top. The expectation is for sideways action. 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 1/9/15: 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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