Friday, January 16, 2015

SPX Daily Chart

The market drama continues as markets are deciding if 2015 should play out to the upside or downside. There's a lot of spaghetti in the chart above but all the lines are important. Price has been playing around at the 100-day MA at 2007 and is now sitting exactly on the 150-day MA support at 1992. The SPX has to choose to bounce or die at the opening bell and S&P futures are weak. A rupture of the 150-day would be a big deal because it held in December. The 200-day MA is 1966. The 20-week MA is 2013. The 10-month MA is 1981. The 12-month MA (the cliff) is 1962.

The slope of the 150-day MA is a key indicator that tells you if your stock or index is in a cyclical bull or cyclical bear pattern (pink line). Note the flattening in October showing that the stock market was rolling over into the rabbit hole. That is where the global central bankers colluded to save the day and create the epic rally from October to early December. Central bankers are drug dealers that boost markets with their easy money heroin but the high wears off and the junkie traders always need another fix. Watch the slope of the 150-day MA since that will firmly verify that stocks are rolling over into an extended bear period (weeks and months), or not. The 150-day MA slope continues to inch higher so stocks remain in a cyclical bull pattern as per this indicator. The RUT 150-day MA is flat for months so pay more attention to that one as a leading indicator since the SPX will follow the Russell.

The tight gold standard deviation bands squeezed out big moves that went to the downside in September and early December. Price is a hair away from the lower band at 1987 and rising. A touch of the bottom band would open the door to price recovering to the middle band, also the 20-day MA, at 2049. There is a juicy gap at 2024-ish that will require filling at some point forward as well so these two levels are key upside targets to keep in mind when the relief rally arrives.

Markets are typically bullish moving into a holiday weekend so a near-term bottom would be anticipated today and with the weaker futures the dip-buyers will probably jump in directly after the opening bell. That jump-the-gun-mentality may lead to a lower low which could serve as a near-term bottom. The indicators are weak and bleak for the MACD line, stochastics and money flow so a lower low in price would be anticipated after any bounce occurs for a day or few. Equities may stagger sideways since ECB President Draghi will bring the tablets down from on high to tell markets how to trade on Thursday only four sessions away. 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.

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.