SPX 60-Minute Chart with 200 EMA Cross Overbot Rising Wedge Negative Divergence

The 60-minute chart provides a bullish or bearish read on markets depending if price is above or below the 200 EMA.  The bulls launched the SPX up thru the 200 EMA on the happy fiscal cliff resolution as the year began signaling bullish markets for the hours and days ahead. The bears were counting their chickens in December, right before Christmas, as the wheels started falling off the markets. Price collapsed thru the 200 EMA between Santa and New Year's.  Note the text book back kiss as trading started on 12/28/12, and the price collapse so it was smooth sailing ahead for bears. At this point the markets can be assumed to be in a downtrend but alas, the Congress clowns perform a juggling act, passing a bill that is a national embarrassment, not even addressing the debt ceiling, but the markets loved it and the rocket launch occurred.

The blue lines show important S/R at 1472, 1468, 1460-ish (1457-1461), 1441 (1441-1444), 1433, 1416 and 1403.  The 200 EMA is at 1437 and climbing. Interestingly, if the spank down occurs, as is the theme in this morning's charts for the SPX, the 1440's are shaping up to be a target zone and in the hours ahead the 200 EMA will be up into the 1440's as well, so perhaps an epic test of the 200 EMA shall occur this week.

Note the red rising wedges and negative divergence that create the smack downs. The stochasitics are overbot (bearish). Interestingly, there is no trace of long and strong momo whatsoever, all indicators across all time frames (hours and days) are negative. There is only one direction to move in, down.  Now if China announces happy news tonight and promotes their continued tall tales with even taller data, the copper, oil and commodities markets will run higher and so will the SPX.  Conversely, China may provide negativity. Watch the copper, oil and commodity markets to provide clues on market direction.

Projection is a smack down to occur with the SPX testing 1468 then 1460-ish. The 1457-1461 is key support and would be expected to fail this week opening up a pathway lower to the 1440's where a test of the critical 200 EMA may occur and decide the direction forward. 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.