Monday, August 24, 2015

SPX 2-Hour Chart

Intraday stocks are selling off again. On the 2-hour chart above, note that the low this morning came with the indicators at lows although stochastics were oversold and positively diverged creating the bounce to price. Even considering the horizontal green price bar as equal lows for the candlesticks, the chart indicators are positively diverged but not the MACD line. This hints that price wants to come back down and that is what is currently  happening this afternoon. If price prints inside the purple circle a matching or lower low in price see if the indicators are all positively diverged (staying above the green lines in the margin), if so, a more firm bottom will be placed. The high CPC and CPCE put/call ratios and high VIX should kick in where a recovery rally begins. It will be interesting to watch into the close.

Some index longs may be in order if price comes down into the circle. Keystone played the bounce from this mornings low with index ETF's and exited the quickie long trades with profits due to the chart above. Now will consider reentry on the long plays as price comes into the circle. Bought SSYS this morning and cashed in after it popped. It is one to consider as a long trade either short or long term. The charts show possie d and are attractive for a recovery but you have to do your own homework on Stratasys.  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 3:00 PM: The SPX comes down for a lower low in the chart above at 1890 with indicators positively diverged except for the MACD line. The bears still want to squeeze out more weakness. So stocks may rally again due to the possie d indicators but price should come back down until the MACD line can positively diverge. Keystone bot some SSYS for a long position. From 1 to 3 candlesticks are likely needed to place the bottom for the SPX since the MACD line is weak so that is 2 to 6 hours trading time which is the remainder of today and well into Tuesday's session where the bottom should occur for the SPX. The near-term bottom for stocks is likely at the doorstep very very close.

Note Added 3:24 PM: TICK plummets to an uber low at -1100. Keystone bot some long index positions. The 2-hour chart is positively diverged except for the MACD line ditto the 1-hour chart. Stocks may repeat the path from earlier today rallying higher but then retreating lower again say in tomorrow's trade. The TICK machine hit -1340 at 3:22 PM EST. This represents uber negativity (typically when stocks will recover), however, equities remain at the lows languishing with 30 minutes of trading remaining.

Note Added 3:32 PM: The SPX LOD is 1867 so the bears took price below Friday's low at 1871. The SPX is currently at 1881, slapped -4.6%, down 90 points. Price is in the purple circle above with RSI, histogram and stochastics positively diverged wanting a bounce higher in the SPX but the MACD line is weak and bleak and the ROC is flat leaking a hair lower so price may want to come back down after any bounce occurs. The bounce this morning was from 50 to 70 SPX handles off the lows.

Note Added 3:37 PM: Remember, the put/call ratios are at uber highs; Keystone posted the CPC chart on the weekend. Those high put/call ratio's and the high VIX are signaling a near-term bottom in stocks and potentially substantive relief rally.

Note Added 3:47 PM: Big move off the low at 1880 14 minutes ago. SPX pops from 1880 to 1922 a quick 42-handle bounce. Phenomenal trading action. This is why trader's love high volatility; it opens doors to a lot of trading activity and action.

Note Added 3:49 PM:  The SPX is at 1921 exactly at the -10% correction level. The peak top was 2135 so subtracting -10% (214 points) is 1921. Will the S&P 500 close with a -10% correction printing, or, recover and print above 1921 refusing to yield to a -10% market correction? The TICK machine hit +1000 at 3:38 PM which is uber bullish so a quickie retracement in stocks is needed for a few minutes to dissipate the bullishness.

Note Added 4 PM:  Stocks retreat into the closing bell and SPX ends at 1893, down -3.9%, losing 78 points, and in -10% correction territory joining the Dow, Nasdaq and Russell 2000. Rumors that the PBOC will step into Chinese markets tonight helped create the bounce during the last hour. All eyes will begin focusing on Asia and the Asian and Aussie traders are likely receiving less sleep in dealing with the markets like the US traders.

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