Tuesday, January 20, 2015

SPX Weekly Chart

Here is a close-up of the SPX weekly chart only showing the last month. Today begins the new candlestick for this week and will continue to develop through Friday. Stocks bounced at the opening bell into the 2024-2032 resistance area and then retreated. Stocks are printing at the lows as this message is typed the SPX at 2006.

The 20-week MA at 2015 is a key support/resistance level especially for those of you that prefer to follow the intermediate and longer term rather than the short term and day trading. Very simply, the bulls win big for the weeks ahead if price moves above the 20-week MA at 2015. Bears win big moving forward if price stays under 2015 and leaking lower.

The moving averages have been playing a key role in recent price action. The 100-day MA is 2007.50 so price will fight at this S/R level for a while deciding to bounce or die. The 150-day MA is 1992.81 which would indicate drastic market trouble if it fails. The 20-day MA and 50-day MA's at 2046 provide overhead resistance. So the 100-day MA is wearing the pants now. Bulls will recover if they keep price above 2007.50 and heading higher--they will run higher to the 20-week MA resistance again. The bears win big if price remains under 2007.50 and heading lower since this likely sets up for a test at 1992 which would be critical for the stock market.

The SPX 1-hour chart did not fully negatively diverge ahead of the downdraft in price. Ditto the 2-hour chart so it would not be surprising to see price recover again to fight at the 20-week MA at 2015 and higher. Stocks may simply trade sideways choppy into the ECB decision on Thursday morning. 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 9:08 PM:  The SPX prints a LOD at 2004 and recovers from lunch time into the closing bell overtaking the 100-day and then the 20-week MA to finish above 2015 a feather in the bull's cap. The SPX 2-hour chart continues to show long and strong indicators ditto the 1-hour chart so additional highs in price would be expected after any pull backs in the hourly time frame. Thus, if it takes one to four candlesticks for price to display negative divergence for a potential pull back, that can easily take trading through tomorrow and we all know what happens Thursday morning--the ECB decision. So there may be some more sideways choppiness until President Draghi brings the tablets down from on high. Keep an eye on the Russell 2000. The RUT came up intraday and tapped on the 50-day MA resistance at 1179 from the underside and was spanked down. The RUT closed at 1170 nine points below the 50-day MA so watch this drama closely as a bull versus bear market signal. If the RUT moves up through the 50-day MA at 1179 the stock market will be on its way higherMarket bears must prevent the RUT from moving above 1179 by all means necessary. Keybot the Quant remains short and identifies SOX 672.38 as an important bull-bear line in the sand (semiconductors). Bulls will create strong upside market fuel if SOX moves above 672.38. Bears must hold SOX under 672.38 with all their might. SOX begins at 670.57.

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