Thursday, November 14, 2019
SPX S&P 500 30-Minute Chart; 8 and 34 MA Cross Watch; Sideways Symmetrical Triangle
One of Keystone's fave VST (very short-term) indicators is the 8/34 MA cross on the SPX 30-minute. The 8 MA is above the 34 MA forecasting bullish joy ahead, however, the chart shows how this is a knock-down, drag-out, tug-o-war, bull-bear struggle.
The 8 MA keeps coming down to stab through the 34 MA to start bearish price action but the bulls have hardened the 34 MA making it impenetrable to the 8's intentions. Bulls win if the 8 remains above the 34. Bears win if the 8 stabs down through the 34.
Price is at the apex of the blue sideways symmetrical triangle so an up or down decision is needed. The vertical side of the triangle is from 3082 to 3102 so that is 20 points. Thus, a breakout higher from 3094 will take price to 3114. A breakdown from 3090 targets 3070.
Keybot the Quant algorithm remains long but is in position to flip short. If the SPX drops below 3079, Keybot will likely flip short. The bears have their work cut out for them since the SPX price is in the 3090's.
The 8/34 MA cross will tell you the path ahead. By definition, the S&P 500 price would have to move below the 8 MA to curl it downwards to create a negative 8/34 cross. The SPX, 8 MA and 34 MA are all at 3093-3094 so it is about time that price makes an important decision. It is time for the S&P 500 to take a dump or get off the pot. 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 10:16 AM EST: Chairman Powell is tap-dancing, er, speaking, before the House so the stock market receives a slight rise in its Levi's. The SPX is up 2 points to 3096 so the bulls are trying to push price higher up and out of the triangle. Whoa. Copper is down -0.5%. The sogginess in the red metal is why price is having trouble moving higher. CSCO crashes -7.7% hurting the Nazzy indexes; that is ugly. Copper has performed an intraday reversal of over -1%. The bears are gaining strength despite the slight positivity in stocks. VIX 13.02. Both the VIX and stocks are higher so one of them is wrong.
Note Added 10:34 AM EST: There you go. The SPX is at 3093.00 and the 8 MA is 3093.16. If price remains below the 8 it will curl it downwards for a potential negative cross and it does not have to go far since the 34 is at 3092.93. The plot thickens. We are watching the conception of a market top and stock market drop; humorously, it has a voyeuristic quality to it. The S&P 500 recovers to 3094 so the first weakness lower results in a bounce. The bears will try again. The SPX 3093.16-ish level is key since if price drops below here, it likely indicates that the bears will begin growling going forward. Bulls will keep flexing their muscles if they keep the SPX above 3093. Chairman Powell's name plaque says Chair Powell. That is what Yellen was called, by her choosing, during her tenure as the Fed head; a non-specific gender title. Humorously, Powell is a chairman when he sits with a wide stance but chair when he sits with his legs crossed.
Note Added 10:48 AM EST: Whoopsies daisies. The major indexes slip a hair red with the VIX climbing to 13.12. Volatility may be correct and stocks wrong. The SPX is down a point sporting a 3092 handle. Epic stock market history may be in the making. Copper -0.6%. 10-year yield 1.83%.
Note Added 11:00 AM EST: Boom. The 8 MA on the SPX 30-minute chart at 3092.77 has stabbed down through the 34 MA at 3092.91 so the stock market just slipped into a negative bear market pattern for the minutes and few hours ahead. Is this the real deal to the downside or is it simply another fake-out move like the others? The bears are growling. Let's see what they got. The SPX, 8 MA and 34 MA numbers will continue comingling and tickling each other at 3092-3093 until a firm winner is established.
Note Added 4:42 PM EST: The bears were joyous today with the 8/34 MA negative cross on the SPX 30-minute chart but at the end of the day the bulls send the 8 MA back above the 34 MA crushing the bear's hopes into dust. This bull-bear drama continues for tomorrow and into Monday with the bulls maintaining control. Comically, we will now call this projected stock market top the Godot Top since we are still waiting for it. The SPX finishes today up 3 points, +0.1%, to 3096.75 a new all-time record closing high. Today's candlestick on the SPX daily chart is a hanging man another candle that typically signals a trend change in price. The market action is fascinating. The SPX is dancing along the edge of the stock market plateau like Fred Astaire but the rocks remain loose and are giving way. At 3:20 PM EST each session, there are robot/s entering the market buying large blocks of stocks to paint the tape green into the closing bell. This keeps Joe Sixpack, Marie Bagholder and Sally Sucka hyped-up on the stock market buying stocks allowing distribution to take place. For this stock market top, now dubbed the Godot Top, 'the song remains the same' to steal a Zep lyric. The stock market is poised to roll over and die but it keeps dancing around the hospital room having a good time pinching the nurse's bottoms.
Note Added on Friday Morning, 11/15/19, at 11:23 AM EST: The SPX prints 3114.56 a new all-time record high. VIX 12.35. The VIX lows today are at 12.31-12.35 so this level is key going forward. The SPX nailed the 3114 target of the sideways triangle on the upside breakout. The happy trade deal news slightly delays the top.