Friday, July 31, 2015

SPX 2-Hour Chart

The 2-hour chart ruled the day yesterday as described in the previous message. Stocks sold off early in the session on Thursday but recovered due to the long and strong chart indicators on the 2-hour. Low volatility is allowing the bulls to remain in full control. Here is a look at the 2-hour. Price continues higher but negative divergence appears in the histogram and stochastics. The stoch's are also overbot. So a spank down is expected and occurs (red arrow), however, the other chart indicators are long and strong and the RSI has not moved into overbot territory. Thus, the expectation is for price to recover and print another high, and it does this morning.

This high creates a tweezer top vibe but the MACD line and  money flow remain long and strong wanting to see a higher high in price after any pull back. Thus, the near-term top for stocks remains from two to four candlesticks away which is 4 to 8 hours trading time which places stocks into this afternoon and Monday after all the indicators negatively diverge.

Price is maintaining above the 50-day MA at 2099.53 and 20-week MA at 2099.39. The important 200 EMA on the 60-minute chart is 2098.72 signaling bullish markets for the hours and days ahead. The strongest price support is at 2121, 2118, 2110, 2108, 2105 and 2099. The 2098-2100 level is an uber critical gauntlet of support with bulls in full control above. The SPX is above the 2110 resistance so 2118 is likely the destination where a bounce or die decision will occur. VIX is down to 12.02 ready for an 11-handle so the bears got nothing. Stocks should top out in the near-term, however, either late today or on Monday. 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 11:34 AM:  The VIX drops to 11.88 so bulls celebrate by slapping the bears in the face. SPX 2113.

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