SPX S&P 500 Daily Chart; Moving Averages

As is always the case in the stock market when a crash occurs, everyone turns into an arm-chair technician flocking to the technicals and charts for answers, and many of these people are the ones that denigrate technical analysis otherwise. The SPX lost the 200-day MA at 2766 yesterday so the media waves this banner to and fro as novice traders shrink in fear of the almighty 200-day.

The 200 is important but there are other moving averages equally, or more important, such as the 50-week MA and 10 and 12-month MA's.

100-day MA = 2822
150-day MA = 2774
200-day MA = 2766
10-month MA = 2761
12-month MA = 2744
50-week MA = 2742
SPX Price = 2728 (10/11/18)
20-month MA = 2628

The failure of the 200-day is key and led to further weakness but the 10-month MA is far more important since it is followed by the old-timer trader's and used in many algorithms. The two form a confluence at 2761-2766 obviously a key overhead resistance level going forward.

The 12-month MA is one of Keystone's key stock market cyclical signals which indicates that the stock market has fallen into a cyclical bear market pattern for the weeks and months ahead. The bulls must regain the 2744 immediately, otherwise, stocks will continue to weaken and a crash scenario will be on the table. The 12-mth MA is programmed into many algorithms including Keybot the Quant.

The 12-month and 50-week form a confluence at 2742-2744 which is an uber important resistance level. This level tells you if the stock market will be weaker and trending far lower for the weeks, months and perhaps years ahead if under 2742, or, if equities will recover and the sideways to sideways higher trend continues for the stock market above 2744.

S&P futures are up +31 points about two hours before the opening bell for the Friday, 10/12/18, session. Futures pop a few points over the last half-hour due to the JPM earnings release. The SPX begins at 2728 so a move of about 31 points places price at 2759. Thus, the SPX should take the crash scenario off the table after regaining the 2742-2744 level this morning which will then become support but falls short of the critical 2761-2766 resistance level. It looks like the battle today may be in the low 2760's. You can use the moving averages above to see who is winning and to forecast the direction ahead for stocks.

Note the flatness to the 150-day MA. The slope of this moving average is key since if it flattens and rolls over it will send that stock or index, in this case the S&P 500, into a cyclical bear. 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 9:41 AM EST: The stock market opens and equities catapult higher with dip-buyers tripping over each other buying stocks with both fists. The SPX is up 41 points, +1.5%, to 2770. Price blew through the 2742-2744 resistance, now support, so the Armageddon scenario is off the table. The S&P 500 also takes out the 2761-2766 level albeit by a hair. Price is bouncing around in the high 2760's and low 2770's. As explained, the 2761-2766 level tells you a lot about the path ahead for the stock market. If price continues higher, watch the 2774 resistance. Above 2774, the SPX would have room to run higher.

Note Added 10:10 AM EST: There it is. The SPX is at 2774 testing the 150-day MA. Slap, whack, splat, slap. The SPX battles at 2774. Do the bulls have the juice to head higher or do the bears spank price back down to the 2761-2766 support?

Note Added 2:43 PM EST: The bulls try to break up through the 2774 resistance and thwack; the bears slap the bulls lower. The bulls stumble backwards falling below the key 2761-2766 support level, now becoming resistance, so a move to the critically-important 2742-2744 support level is next. Boom. The SPX falls below this key level printing the LOD at 2729 at 12:50 PM where the day started. The bulls recover and send the SPX higher up through 2742-2744 again but that fails at 1:30 PM sending price down to 2736. The bulls try to push higher again regaining 2742-2744 at 1:45 PM only to be slapped in the face once again losing this key level at 2 PM. The S&P 500 comes back up again to the key 2742-2744 level but is spanked lower. Price is at 2738. The bulls must recover the 2742-2744 level since it is a matter of life and death. The stock market is in for a world of hurt for weeks and months ahead if the SPX cannot recover above its 12-mth MA. The tension mounts with about an hour remaining in the trading day and in the week. SPX is at 2739.

Note Added 3:09 PM EST: Boooiinngg. Stocks bounce. The SPX moves up through 2742-2744 staving off Armageddon again. The S&P is at 2755 and may mount a charge at the important 2761-2766 resistance again as the day draws to a close.

Note Added 4:19 PM: The stock market rallies during the last hour of trading the SPX glides higher fro 2732 to 2775.77 the HOD. In the final 2 minutes, the 2774 resistance spanks price lower. The SPX falls backwards landing on the 2671-2766 support ending the day at 2767. The circus continues on Monday.