Saturday, June 27, 2015

SPX S&P 500 Daily Chart Rising Wedge Versus Ascending Triangle

The battle between the red rising bearish wedge and bullish green ascending triangle patterns continues. Bears win below the red lines while bulls win above the green lines. This battle is high drama for the last couple months. The bulls broke up and out of the green triangle in May only to receive a spank down from the upper red trend line of the rising wedge. Then price falls through the lower rail of the red wedge causing bears to cheer but bounces at the bottom trend line for the green triangle empowering the bulls again.

The bears receive another successful back test of the wedge failure which lights the way lower only for the SPX to bounce off the lower green trend line again. The SPX then ran higher only to fail at its 2120 base line a few days ago. Price appears unable to move above the red trend line with several successful back tests occurring so price weakens and drifts lower. The bulls are still fighting, however, with price at 2101 since the lower green line support is at 2091. Under 2091 will be big trouble for bulls and the 2078-ish area will be likely on tap.

Note how price respects the 100 and 150-day MA's support levels this year. Price bounced directly up off the 100-day MA support at 2095 on Friday. The 20-day MA is 2103. The 50-day MA is 2107. June started at 2107 with only two trading days remaining that will determine if the month is positive, or negative. The 200 EMA on the 60-minute chart, a key short-term signal, is, yes, you guessed it, 2107 (SPX is under the 200 EMA indicating bearish markets for the hours and days ahead; bulls need the SPX above 2107-2108 pronto or they will lose their grip). The 20-week MA is 2098. Thus, a serious gauntlet of support/resistance is at 2095-2107. Market bulls win big above 2107-2108. Bears win big under 2095. The 2095-2107 range is noise.

If bulls take out 2107-2108, price will run to 2110, then 2118-2120 to test the ascending  triangle baseline break out, then 2130 and 2135 and higher to 2145 then 2180. The bears must take price under 2091 which should lock in the bearish rising wedge pattern which would typically result in a dramatic collapse. The 1980-2030 level would be easily doable over the next couple months. If 2091 fails, price will immediately test 2086 and if that fails, the 2072-2081 range is next then much lower. Greece talks appear to be breaking down which is a negative for stocks but the PBOC (China's central bank) cut rates a few hours ago which will reinflate the Chinese stock bubble and cause buying around the globe. 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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