Friday, May 1, 2015

SPX 60-Minute Chart 200 EMA Cross

The market bears receive a big feather for their caps yesterday with price falling under the critical 200 EMA at 2095 signaling bearish markets for the hours and days ahead. The bears are on easy street and will continue creating market weakness as long as price stays under 2095. Bulls will rule above 2095.

Stochastics are oversold wanting to see a bounce which occurs off the intraday bottom yesterday. Other indicators are positively diverged (green lines) creating a bounce. The MACD line, however, remains weak and bleak so a lower low in price is desired, at least a visit to the 2077-2083 area again. Watch to see if the MACD line curls higher. Keep an eye on money flow since if it falls much further with a lower low as compared to a couple days ago then price should print another lower low going forward.

The low prints at 2076 and 2073 occur a week and one-half ago when the PBOC (China's central bank) stepped in to goose the markets with the lower triple R's for banks. The central bankers are the market. Note the huge central banker-produced spike in stocks sending price back above the 200 EMA creating another bull party.

The maroon lines show the top on Monday occurring due to the negative divergence, rising wedge and overbot conditions. Price is dropping through the falling wedge pattern (green). The bears are happy but can they keep the SPX  under 2095 into the weekend? It is prudent to expect a back kiss of this critical 2095 level and with the S&P futures up +7 the bulls are likely pushing for a test and showdown early in the day. The SPX appears set to run higher to test 2095 where a critical bounce or die decision will occur determining market direction for the next few days ahead. 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 11:26 AM: The bears are punched in the face with the SPX running higher to 2098 above the 200 EMA on the 60-minute at 2095.03 signaling bullish markets for the hours and days ahead. This drama will continue into Monday. The bears need to find a way to erase three points quickly and push the SPX back under the 200 EMA.

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