SPX 30-Minute Chart 8 MA and 34 MA Cross Sideways Channel 1406-1419

The 8 MA crossed up thru the 34 MA at yesterday's opening bell so the bulls puffed their chests and settled in for an upside day, however, the pop higher was in concert with a large volume push in the opening half-hour to fulfill pent-up trading needs due to the two-day U.S. market closure, and the bounce disappeared quickly.  At luch time, the bears flexed their muscles pushing the 8 MA back under the 34 MA to keep the overall broad markets bearish moving forward.  The fight is a bull-bear tug-o-war and the sideways action on the chart shows that each side has an equal chance of emerging victorious for the days ahead.

The 8 and 34 MA's are only separated by 64 cents.  The sideways channel thru 1406-1419 is in place for five days. Remember how Keystone referenced the 1403-1419 'gauntlet' well in advance. We are in the fight now for this important trading zone. Bulls win above 1419, bears win below 1403-1406. If you scroll back a page or two the previous 30-minute chart shows the positive divergence set up (green lines) in more detail.  The oversold conditions, falling wedge and positive divergence launched the price off the Friday bottom at 1403-1406.  The previous chart also discussed the long and strong leanings of the indicators which wanted at least one higher high and that occurred with yesterday's opening bounce.  The price movement is sideways. The 8 and 34 MA cross cannot make up its mind. The blue sideways triangle shows how price is happy stumbling sideways. Yesterday's action shows price testing the upper channel boundary at 1419 and lower channel boundary at 1406.  Price would not breakout from either side and now moves sideways.

Watch the 8 and 34 MA cross to determine market direction, which is bearish to start the day.  Watch for any price break from the sideways blue channel as trading begins to hint at the direction preferred; 1415 and higher favors bulls, 1408 and lower favors bears. Watch the breakout from the sideways channel. For today, Thursday, bulls will win if they can touch the 1419 handle; this will cause an upside breakout. Bears will win under 1406 today. If you see a 1405 handle print, the SPX will likely start to fail quickly. Price will drop thru the 1403 sturdy support and collapse under 1400.  A move thru 1407-1418 today will indicate that markets may be content with stumbling sideways into the U.S. presidential election on Tuesday. S&P futures at this writing, four hours before the opening bell, are down five. The bears may want to make a run for the lower rail of the channel as the bell rings.  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 11/1/12 at 2:34 PM:  The SPX jumped higher at the open pushing the 8 MA up thru the 34 MA indicating bullishness for the hours and days ahead. Keep an eye on the cross especially since the all-important Jobs Report occurs tomorrow (Friday) morning.