SPX Monthly Chart with 12 MA Cross The Secular Market Decider

SPX monthly chart with 12 MA cross dubbed 'The Decider' since it decides whether we are in a secular bull market or a secular bear market. Obviously, after Chairman Bernanke announced QE2 in late August we exploded into a secular bull market as shown by price crossing the 12 MA to the upside for the September 2010 end of month print. The QE1 rally started in March 2009 and The Decider verified the return to secular bull markets when the cross occurred for the June 2010 print. The bull-bear struggle was obvious last summer with the June cross stating that the markets fell into a seuclar bear, but July the markets were back into a secular bull, but August they failed into a secular bear and headed lower. Then the Fed saved the day, they sure must have been scared by what they knew in August 2010 to start the POMO pumping with QE2.

Currently the RSI and stochastics are agreeable to see another matching high, on a monthly basis, but the histogram and money flow are agreeable to simply see the SPX price trend lower from here on. Typically, these charts resolve with a move up in price to create a matching high or near matching high, say 1330-1350, setting up negative divergence across all four indicators shown, and then the chart will roll over. SPX may not have the strength, however, to move that high again, perhaps it will settle for 1325.

Thus, 1176 is a critical SPX number, should price fall under 1176, the broad markets will be in serious trouble with extensive strong selling. Also, some old-timers like to watch the 10 MA cross, now 1184. Broad markets continue along in a secular bull market for now with the next month end print coming 3/31/11. If SPX price falls down into the 1176 to 1184 zone and fails, a secular bear market will return. Since both the 10 and 12 MA are sloping up now, use 1190-ish as a general number to watch that spells serious trouble for broad markets moving forward. Above 1190-ish, market bulls will party on. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here or any links connected to this information. Consult your finanical advisor before making any investment decision.