Sunday, February 8, 2015

SPX 30-Minute Chart 8/34 MA Cross

The 30-minute provides insight for Monday as the sideways circus drama continues for this year. The 8 MA is above the 34 MA signaling bullish markets for the hours ahead, however, the 8 MA is falling like a stone ready to stab down through the 34 MA to create a negative cross after the opening bell. Therefore, a big showdown is on tap at the opening bell. To prevent the 8/34 negative cross from occurring the bulls must show up ready to play and thrust price higher at the opening bell to cause the 8 MA to change its mind and start moving higher again. If there is not a strong move higher in the SPX at the opening bell, then the negative 8/34 cross is going to occur to pave the way for the bears.

The indicators are mixed but the MACD, histogram and stochastics are weak and bleak wanting to see lower lows in price. The oversold stoch's, however, will help create a bounce for a candlestick or two before the next couple candlesticks after that are lower lows. That 2044-2046 area keeps poking its head up with the charts (blue lines). The 2046 is strong horizontal price support and the 50-day MA is 2044 a critical bounce or die level. The opening bell is very important for Monday. If a big up occurs at the bell the fix is in and the bulls will continue an upside rally to 2061, 2067 and 2075-2076 resistance levels. Watch to see if the S&P futures are up big. If the opening is flat or lackluster with the S&P futures flat or negative, then the bears will likely wear the pants on Monday especially after the negative 8/34 MA cross occurs shortly after the opening bell. 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 7:57 PM on Monday evening, 2/9/15: The market bears kept the S&P futures negative from Sunday evening into this morning's bell and punched the bulls in the face, however, the bears did not have a lot of strength. Semiconductor weakness pushes stocks lower but the financials did not crumble and the NYA remains above the 40-week MA at 10814. The 8 MA stabs down through the 34 MA on the chart above placing the bears in charge for the hours ahead. The 8 MA is at 2049.64 sloping lower which continues the bearishness as long as the SPX stays under here and keeps pulling the 8 MA lower. The 1-hour and 2-hour chart indicators are weak and bleak so from 2 to 5 candlesticks are likely needed before the SPX can bottom with positive divergence, about 2 to 10 hours of trading time. This can be narrowed down as time proceeds but this places trading in Tuesday and possibly Wednesday into lunch time for a bottom to occur. This jives with the CPCE put/call chart looking for a bottom perhaps tomorrow or Wednesday. Interestingly, the President's Day holiday is Monday and markets are closed so stocks tend to be bullish the two days preceding a three-day holiday weeekend (Thursday and Friday). Thus, mixing all this together and sprinkling magic dust on it allows a projection that market weakness may continue for tomorrow, and even into Wednesday morning but a near-term bottom should occur with stocks recovering on Thursday and floating higher into the holiday weekend. Of course news events such as both the Greece and Ukraine events hitting the fan on Wednesday will push markets one way or the other.

On trades, Keystone took profits on XONE exiting the long trade but then reentered opening a new long trade in XONE. That +6% or +7% pop was too good to pass up so the gain was locked in.  ExOne chart is positively diverged so more upside is expected. The rocket fuel started to send it higher but it remains a speculative trade. XONE should either continue a strong move higher, or, can still potentially blow up on the launch pad. Keystone entered WB, opening a new long position, a Chinese internet stock; most of those Chinese stocks are corrupt one way or the other. The WB daily and weekly charts are very attractive with possie d so a launch move may occur with this one. The MACD line on the weekly chart is trying to flatten that would be the only fly in the ointment. The expectation is for a big bounce for WB but it is a very dangerous trade. Keystone took profits on SDP exiting this long trade which was the inverse play against utilities. Utilities may keep falling and the trade will likely be reentered at some point forward. Keystone also bot SSNI on the long side, another dangerous play. SSNI is a smart grid play that would benefit if the country's electrical systems experience a problem in the future. This one has crumbled over the last year and is beaten down. The daily and weekly charts are set up with positive divergence so it is another knife-catch looking for a strong recovery from its over one-year drubbing.

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