Tuesday, August 18, 2015

SPX S&P 500 Weekly Chart Tight Standard Deviation Bands Ready to Squeeze Out Major Move

The tight pink standard deviation lines foretell a huge market move at the doorstep. The SPX has only had this tight of bands two other times once in 1966 which was the end of a bull market and in 1994 which ushered in volatility. The bands were tight back in the summer of 2011 which resulted in the August 2011 waterfall crash but those bands were nowhere near the tight bands now.

Markets are wound as tight as a drum and ready to explode one way or the other; tight bands only predict a huge move not the direction of the move. This is a weekly chart so once price commits the move will be several weeks in duration either up to 2180 maybe 2200 or higher, or, down to sub 2000. Price is elevated above the moving averages only recently starting to back test the 50-week MA, now at 2061 (the year began at 2059). Price has not back kissed the 200-week MA since late 2011.

The chart indicators want to see a down move. The blue lines show sideways projections for price. The epic Federal Reserve rate decision that will create huge market theatrics is on Thursday, 9/17/15. This is four weeks away but the bands are already tight ready to squeeze the move in stocks. Therefore, stocks may undertake a 3 or 4 week move going into the historic September meeting where Fed Chair Yellen will decide the entire fate of global markets by deciding to begin hiking rates, or not. On 9/17, the move in progress may either accelerate dramatically in the same direction, or, pull a quick reversal with resolution in the opposite direction.

The bears have the advantage but the central bankers are extremely powerful. You should see epic market behavior occurring now through October. 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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