Keystone's SPX 1-Hour Chart with 200 EMA Cross
The SPX fell through the 200 EMA at 1500 today, a very bearish signal. The 60-minute chart on the weekend highlights this in more detail. Price came up to test the 1524 resistance and died. The closing print is at the lower rail of the blue channel. Note the positive divergence in place for all indicators pointing to a bounce back up coming. The small red lines show some downside momo may be in place for a couple or few candles so tomorrow may see a flat start and then perhaps a recovery, timed with Chairman Bernanke's talk. He will be speaking and pumping the QE easy money so markets may become buoyant off his happy talk. It would be interesting if markets do not rally off of Bernanke tomorrow. The 200 EMA is very important so a back kiss would be prudent. If the SPX comes up to back test the 1500, and then collapses, markets will have big trouble ahead. As long as the SPX stays under the 200 EMA, the bears rule the markets. Important S/R is 1524, 1520, 1518, 1516, 1505, 1500 (200 EMA), 1498, 1495, 1485, 1481 and 1476. The 50-day MA is 1476.72. 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.
KS, would Keybot flip back to the long side if bulls breakthru 1500 convincingly? Also, since SPX pierced the bottom BB, would a move back to 1510 (middle BB) be in order? Any new wave counts for the EW traders on here?
ReplyDeleteAnon, the SPX will likely bounce tomorrow, as the chart shows with the positive divergence. The most important thing that you want to watch is the VIX 15.60 level. As long as VIX stays above 15.60, it will not matter if the SPX moves up to 1495, 1500, 1505, 1510, 1515, the volatility is much more important. If VIX drops below 15.60, then the bulls take over again and the bears lose. RTH closed at 45.51 under the critical 45.54 bull-bear line so watch 45.54 closely as well. On a market bounce, RTH will likely move above 45.54 at the opening bell tomorrow. Pay attention to HD earnings at 6 AM EST tomorrow morning since HD earnings will dictate RTH. But, most importantly, VIX 15.60 is your key. And, yes your are correct on the BB's, however, the lower BB may plummet like a stone now moving vertically downward. Price may chase lower. The 50-day MA is 1576 and it would be nice to take a test of that level. Daily chart is weak wanting lower lows but the chart above, the minute and hourly charts likely want to see some sideways to sideways up buoyancy tomorrow, but the negativity should reappear in short order. Consumer Confidence data is key at 10 AM where markets will pivot.
ReplyDeleteThe lower BB violation is also interesting since it mimic's the action for the last day of the year when the fiscal cliff resolution occurred. It is obvious that everyone expects Bernanke to deliver the goods tomorrow. The FOMC meeting is 3/19 and 3/20 so he will not do anything with a meeting so close. Perhaps traders will be disappointed. Markets need that free money crack cocaine; it is the only thing that holds them up.
ReplyDeleteI have a question, well newbie question: How does technical level work out when there are many fundamental or macro speculations like this market? For example, there were some strong support that held on Thursday and Friday last week but they are broken due to the speculation of Italy election as today (if the election was not messy, wouldnt s&p500 move higher or at least hold above 1511 today?). If those technical level does not work well, how do you determine you should trade base on technical setup and technical level in the next few days?
ReplyDeleteThanks