Friday, June 12, 2015

SPX 60-Minute Chart 200 EMA Cross

The SPX drops under the 200 EMA on the 60-minute at 2105.45 signaling bearish markets for the hours and days ahead. Price closed exactly on the 200 EMA on Wednesday and in Thursday trading the bulls ran higher above the 200 EMA so it looked like a slam dunk for higher equities. Today, however, is a different story as the SPX collapses through the 200 EMA.

The green lines show the oversold conditions, positive divergence in the indicators and falling wedge pattern that conspire to create the recovery rally, which occurred starting on Tuesday. The top and high print yesterday comes with overbot stochastics and some negative divergence (red lines) but technically the top is shaky. The RSI never reached overbot territory and the MACD line kept moving higher with the price high seven candlesticks ago; so the expectation would be for price to come back up again, which it did, but it did not come back up for a matching or higher high as would be expected. The bears would be better off if price came back up to 2115 three candlesticks ago to place a more firm market top. Thus, the door remains open for another rally move higher for stocks. This would be in concert say with a potential Greece bailout resolution this weekend or early next week. The SPX 2-hour chart is showing the same behavior as described so the price move lower to begin today is met with a bit of skepticism.

The uber low CPC and CPCE put/call ratios signal a market top at anytime over the coming days so the bulls may pull a tricky maneuver and bring the SPX higher again especially if the Greece bailout drama is resolved. For now the bears are in charge. Use the 200 EMA at 2105.45 as the line in the sand. Bulls win big above 2105.45. Bears win big below 2105.45. The SPX recovers as this message is typed now printing at 2100. 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.

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