Monday, July 25, 2016

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

The saga with the sideways action and tight standard deviation bands on the 1 and 2-hour charts continues. Price makes a matching or higher high while the indicators slope lower, negative divergence, so there is no oomph remaining and stocks should retreat. However, the central bankers are powerful. The Fed decision is on tap Wednesday afternoon and most importantly the BOJ on Friday morning. Big stimulus is expected from the Bank of Japan and this ongoing global central banker intervention maintains a bid under stocks.

Price was squeezed higher three days ago but retreated after hitting the top standard deviation line. Price then tagged the middle band but has not yet touched the lower band. Perhaps that is on tap at 2162. Technicals want to see a roll over to the downside but the central bankers are standing on the sidelines waving cash at everyone telling investors to not worry.

The SPX remains on the island above 2159 so an island reversal pattern remains in play as previously highlighted (purple lines). Thus, the 2159-2162 is a key support level for price currently. If it is lost, price will likely be at 2153 and lower in a flash. Market bears got nothing substantive unless they push under 2123. The 200 EMA on the 60-minute is 2123 and price is above signaling bullish markets for the hours and days ahead. If 2123, is lost, stocks will be falling in earnest. Above 2123, the bulls continue smoking fat cigars dabbing the ashes in the bears face. 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 11:07 AM EST: The SPX falls under the LOD and is now down to 2163 testing that lower standard deviation band and the base of the island at 2159. Bulls need to hold this 2159-2163 area or the bears will bite off a chunk of market flesh. Stocks are typically buoyant, about 80% of the time leading into the Fed decision so if the bears want to create some selling this is their window now into tomorrow morning.

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.