SPX 30-Minute Chart 8 and 34 MA Cross
The seesaw continues with the 8 and 34 crosses continuing with neither side wanting to assume full control. For now, the 8 is above the 34 so the bulls are in charge for the hours and days ahead. The stochastics are overbot, and histogram is showing negative divergence, which may create softness, but the RSI, MACD line and money flow are long and strong wanting to see another high. This would set up a test of the 62% Fib retracement at 1519-1520 described earlier. At that time it can be determined if negative divergence forms to create a more substantial move lower again. The 1518 and 1520 levels are strong horizontal resistance and the 1505 strong horizontal support so pay attention to these levels as early leads on the preference for direction.
Projection is more up before rolling over again, the 1524 R cannot be ruled out but a roll over from the 1518-1520 area would be anticipated at this time. Of course China PMI news, or even the Italy elections, may dictate the decision on direction and result in either a wild gap up move at the opening bell, or, a collapse lower. Bulls need to see strong China data. Bears need to see weak China data so copper and commodities are further beaten. The 8 and 34 MA cross is the most important thing on this chart. Bears got nothing unless they curl the 8 MA back down. 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.
I think this week is likely the start of an intermediate topping process that may last 1 to 3 weeks. There may be a few more moves above Tuesday’s high but many will use the upside moves to scale out of the market. I base this on reduced market breadth (SPXA50R), increasing distribution days and any further SPX CCI 20 & 53 divergence. The economic underpinning of an SPX drop will be reduced consumer spending based on increasing energy costs and FICA changes combined with concerns about the 27 March continuing resolution expiration. I expect the House leadership to make a stand with regards to funding past 27 March. However, still long the SPX until the market tells me beyond doubt it is time to get out. You have the best sites on the internet!
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