Sunday, June 12, 2016

SPX (S&P 500) 60-Minute Chart 200 EMA Cross

Just as the 2-hour chart was highlighting a couple days ago, the one-hour chart above formed negative divergence (red lines), along with a rising wedge pattern and overbot stochastics, which created the spank down off the top. Price is in a downward-sloping channel testing the top trend line as the new week of trading begins. A Tweezer Bottom occurs during the last two candlesticks, however, the MACD line is weak and bleak wanting to see another low in price. The RSI is not yet oversold either so the door is open for more downside in price. The oversold stochastics helped to bounce price into the closing bell during the last 45 minutes late Friday.

One of Keystone's key short-term trading signals is the 200 EMA on the 60-minute now at 2084. Price is above signaling bullish markets for the hours and days ahead, however, note that price is coming down and as mentioned probably wants to test the critical 200 EMA for a bounce or die decision. Note how important this level is when price was rallying higher one month ago. The SPX tapped twice on the 200 EMA bumping its head against this ceiling but could not move above and then on the third try, whammo, punches up through the 200 EMA and catapults stocks to more highs (green circle). The same thing can happen in reverse if the 2084 fails so watch it like a hawk this week since it dictates stock market direction. 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 Monday, 6/13/16, at 10:18 AM EST: The US stock market is open less than one  hour and trading relatively flat after an initial dip. LOD 2088. The SPX has not threatened the 200 EMA on the 60-minute now at 2084.18. Also watch the VIX 200-day MA at 18.39. VIX is at 18.30 a hair on the bull side. Stock market trouble will occur if VIX moves above 18.39. Market bulls are fine if VIX remains under 18.39. Watch it closely. If VIX moves higher into bear territory above 18.39, stocks will be dropping, so then watch for the potential test of the 200 EMA at 2084.

Note Added on 6/13/16 at 10:23 AM EST: SPX 2095. VIX 18.27. The VIX 18.39 level tells you everything you need to know to begin the new week of trading.

Note Added on 6/13/16 at 8:17 PM EST: The VIX catapulted higher well above 18.39 so you knew the fix was in to reward the bears. The SPX moved lower to test the important 200 EMA at 2084.26 and failed creating market mayhem. Watch 2084 since price may come back up for a back kiss and bounce or die decision. Market bulls can redeem themselves if they move SPX back above 2084. The bears will create more and more stock market carnage each day the SPX is under 2084.

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