Tuesday, September 15, 2015

SPX S&P 500 60-Minute Chart Tight Bands Ready to Squeeze Out a Big Move

The SPX remains under the 200 EMA on the 60-minute chart at 1996 forecasting bearish markets for the hours and days ahead. Bulls need price above 1996 or they got nothing. The standard deviation lines are  squeezed in tight. Even though three days remain before the important Fed rate decision on Thursday afternoon, the stock market should move strongly and quickly in one direction or the other today. Tight bands do not forecast direction only that a strong and quick move will occur either up or down. Like squeezing a tube of toothpaste with the cap on; you keep squeezing and boom, a violent move occurs.

The previous CPCE chart shows the elevated put/call ratio so a near-term bottom should be at hand so the presumption is that stocks may bounce strongly. S&P futures are flat about one-half hour before the bell. It should be a wild move today perhaps with 30 handles or more of movement in the S&P 500. One side will be happy and one sad at the end of today.

The green ascending triangle remains in play. Reference prior charts for more study. The vertical side is about 120 handles so if the bulls take out the 1985-1988 resistance level, 2100 is on the way. The blue sideways triangle is also in play and this pattern does not have a bull or bear preference until price breaks out one way or the other. The blue vertical side is about 130 handles so a breakout move higher to 1960, 1970 and higher will begin pushing stocks to a 2080 target. A breakout lower under 1950, 1940 and lower will begin pushing stocks downward to a 1820 target. The stakes are high for the stock market this week. That is why many traders are sitting out the drama until Yellen tells everyone how to trade.

Look for a big market move today due to the tight bands on the hour chart and the presumption would be higher due to the high CPCE put/call. If stocks sell off instead, this should only more firmly place a near-term market bottom for stocks. 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 9:15 PM: The tight squeeze resolves upwards with the SPX gaining 25 points, +1.3%, to 1978. Intraday, the high for the SPX is 1983 exactly a 30-point gain as Keystone forecasted above. The SPX begins Wednesday at 1978 and the 200 EMA on the 60-minute is 1994 so markets remain bearish for the hours and days ahead--unless the SPX moves above 1994 then the path ahead is bullish. Looks like a test of that uber strong price support level at 1985-1988, the resistance gauntlet, may be on tap for Wednesday.

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