Tuesday, January 24, 2017

SPX S&P 500 60-Minute Chart; 200 EMA Cross; Sideways Channel

The new year begins with stocks trading through sideways slop. The 200 EMA cross on the SPX 60-minute chart is a useful short-term market indicator. The SPX price is above the 200 EMA forecasting bullish markets for the hours and days ahead. Note how the SPX price tested the 200 EMA support to begin the year. This was the bear's big chance to send the stock market lower but instead price bounced. The bulls punched the bears in the face to welcome in the new year.

Market bears need to sink the SPX price under 2255 to signal the all-clear for downside market carnage. Bulls simply need to maintain the S&P 500 above 2255 and they will be fine going forward.

To begin the year, price gapped higher (brown circle) and sat on an island above 2262. An island reversal would have occurred if price would have dropped back down through the gap from 2262 to 2257, however, instead, price simply leaked lower to fill the gap seven days ago. All the gaps are buttoned up on top but look at that juicy gap down below at 2240-2246; it is big enough to drive a truck through it. This gap will need filled at some point forward.

The sideways channel is in play. Bulls win big above 2276-2278. Bears win big under 2257-2262. The sideways choppy slop continues through 2262-2276.

The 8/34 MA cross on the SPX 30-minute chart, a competing short-term market direction indicator, is bearish while the 200 EMA cross on the 60-minute chart above is bullish. One of them is wrong so watch these crosses closely to confirm the stock market direction ahead. 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 Wednesday Morning, 1/25/17: The SPX rockets higher on Tuesday, 1/24/17, printing a new all-time record high at 2284.63. The S&P 500 gains 15 points, +0.666%, to 2280.07 a new all-time closing high. Price jumps up through the top channel lines at 2276-2278 so bulls throw confetti. Watch for follow-through, or not.

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