Tuesday, October 27, 2015

SPX S&P 500 2-Hour Chart Sideways Triangle

The 2-hour chart continues to digest the central banker pumping over the last two weeks. As described in prior charts, the brown circle is the Jon Hilsenrath article that started the rally. The blue circle is ECB Presdient Draghi promising a bright new shiny pony in early December. The gold circle is the PBOC cutting rates and bank triple R's. The central bankers are the market. You have to be blind and dumb to not see and understand this fact; nothing has changed over the last 6-1/2 years since the Fed began their Keynesian schemes with QE 1 in early 2009.

The neon green sideways triangle needs to make a decision. The vertical side is 20 handles so price will either jump to 2090 or drop to 2050. Yesterday's candlesticks are in a tight range. Five candlesticks ago late Friday price spiked to a new top and the indicators were negatively diverged except for the MACD line in the near term that is open to another higher high. In general, the chart is consistent with topping behavior. The market bears would be okay if price comes up for the higher high say at 2080 because neggie d should be in place for all indicators at that time and that would smack price lower going forward in this 2 hour time frame. The other alternative is that price would roll over from here.

The SPX receives upside juice from the tight standard deviation band squeeze. Price has violated the upper band so a move back to the middle band, the 20-day MA, at 2050, and rising, is in play. The year began at 2059. Price is expected to top out at this 2070-2090 level over the coming hours and venture lower to 2050-2060. The FOMC rate decision is on tap tomorrow afternoon so the market action until then may be noise.

The 200-day MA is 2060. The 50-week MA is 2061. Keystone's critical 'cliff' level is the 12-month MA at 2051. The critical levels all encompass the 2050-2061 area. Therefore, bulls are happy above 2061. Bears are not happy unless the SPX goes sub 2050. 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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