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

The SPX losing the 200 EMA on the 60-minute is a very bearish market signal. About seven days ago, price teased the 200 EMA but the BOJ easing, that hit the after burners at the 4/5/13 low, catapulted markets higher. The Fed and BOJ are the driving force for the market upside. So today begins with the SPX under the 200 EMA signaling bearish markets for the hours and days ahead.  Watch it closely today. A back kiss of the 1556.38 is a given. Once the back kiss occurs, the SPX should either bounce, or die. On 4/5/13, price bounced and the markets recovered after the back test.

The blue lines show a potential H&S pattern that will need a right shoulder moving forward. The head at 1595 and neck line at 1540 targets 1485 if the 1540 fails. The red lines for the indicators show slippage into the oversold territories and these lows in the indicators are lower than the prints from early April.  Price, however, remains higher than early April. The weak indicators should act as a weight on price pulling the SPX lower to test 1540, at a minimum. Once the 1538-1540 area is printed the development of positive divergence, or not, can be studied.

A potential path for price would be to successfully back test the 200 EMA at 1556 today, and collapse down to the 1540 support test. Then a bounce from there back up to the 200 EMA again, which would create a right shoulder, then roll over down through 1540 and far lower. However, this scenario is pulled out of thin air and the price action will determine what transpires in the coming days. Simply watch the SPX versus the 200 EMA. This signal is updated regularly on the Short-Term Market 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.