SPX 60-Minute Chart 200 EMA Cross H&S Pattern

The SPX is below the 200 EMA signaling bearish markets for the hours and days ahead, however, the markets are set to open the week strongly higher which would place the bulls back in the driver's seat. The SPX collapsed through the 200 EMA three days ago ushering in market weakness, but the falling green wedge and positive divergence bounced price as pointed out on Friday morning. The stochastics are overbot but the indicators in general are long and strong wanting to see higher highs in price, sans the money flow that is negatively diverged right now and uninterested in seeing price move higher.

Watch for a potential rising wedge pattern and negative divergence to form as the week begins. The pink lines show the H&S pattern under development. The bulls held the 1540 neckline which was a critical stick-save last week and gave the bulls the juice to recover. The H&S with head at 1600, neck at 1540, targets 1580-ish if the 1540 fails. Key price resistance levels above are 1555.69 (200 EMA), 1561, 1564.06 (20-day MA), 1565, 1569, 1575-1576, 1589 (last week's high), 1593 and 1597. The SPX may want to create more right shoulder action for the H&S to begin the week.  Projection is lower prices after a recovery rally occurs today and/or tomorrow. This signal is regularly updated on the Short-Term Signals page. 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 4/23/13 at 6:30 AM:  The SPX moved above the 200 EMA at 11 AM yesterday signaling bullish markets for the hours and days ahead. The move is tentative, however, so today's (Tuesday, 4/23/13) action is very important.