Keystone's SPX 60-Minute Chart with Price Versus 200 EMA Cross

The 200 EMA on th e 60-minute chart is one of Keystone's turn signals for the markets. Reference the Turn Signal page.  The indicator has remained bullish for the last couple months.  If the 200 EMA is lost, now at 1431.92, the broad indexes will weaken further moving forward. Note how price respects the 200 EMA. To start the month, the day after Labor Day, price tested and remained above this critical moving average and then headed higher during the Draghi and Bernanke money-pumping. Price came down to test the 200 EMA this morning and bounced. Price started leaking late day once again but the bell rang saving the day.

The green lines for the indicators show positive slopes and would be positive divergence if price would have placed a lower low inside the green circle. But, price has not made a lower low so positive divergence cannot exist, yet.  This set up alone hints that price needs to test the 200 EMA tomorrow and print inside the green circle. At that time the indicators can be studied to note if the positive divergence remains in place that will serve to bounce price higher from the green circle.  The MACD line is weak and bleak so regardless of the lower print in price, the MACD wants to see further lows in price.  SPX 1429 support would reestablish the sideways channel shown. Also note the large volume candle from last Friday. That price level at 1460-1465 will need retested in the future but that test can occur a day or two from now, or, two or three weeks from now.

In a nutshell, watch the 200 EMA. If price fails, then the SPX is going to explore lower numbers moving forward; the low 1400's.  If the test of the 200 EMA occurs tomorrow and the bulls bounce price, it will likely bounce from the green circle at 1429-1432, but, the bounce will likely be short-lived and price will come back down again for another test of the 200 EMA after that.  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.