At the same time the blue sideways symmetrical triangle is in play and the stakes are high. The vertical side of the triangle is 40 to 50 handles. A break up and out of the triangle at 1660 would lead the way to a 1700-1710 target. A failure out the bottom at 1653 would create a target to 1600-1610. The red lines show the negative divergence spank down with a higher high in price but the indicators are all sloping negatively showing that price ran out of gas. The green lines show a cheesy bottom five days ago. Positive divergence did not appear to bounce price. Price simply recovered on central banker money printing with the weaker yen. Note how price never made a lower low on 5/24/13, a prerequisite for any positive divergence to develop. The indicators are all sloped positively back then but price never printed the lower low to create positive divergence. This is an important concept since it hints that the price recovery is faux.
The indicators are now verifying the sideways triangle action stretching out sideways preparing for an important up or down decision. Pay attention to the 8/34 cross and watch price since 1660+ will make the bulls rejoice while 1653- will cause the bears to throw confetti and cheer. S&P futures are -9 about two and one-half hours before the U.S. opening bell giving the bears the nod at this juncture. 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 2:42 PM: The 8 sliced down through the 34 MA at 1 PM EST signaling bearish markets for the hours ahead.
You can really see the sideways triangle on the ES futures hourly chart going back to May 22nd. Again, it's a 50-point move possible. I don't know, KS. Looks like it has room at the apex to escape Friday (Friday buoyancy/$5B POMO) and then make a decision early Monday?
ReplyDeleteYep, a lot depends on utilites, if UTIL stays above 481 then a sideways day likely. There is an MSCI rebalancing today so volume will accelerate in the last half hour of trading with some potential wild moves. If UTIL fails 481 then the downside should rule.
DeleteSorry, I dont know what MSCI stands for? thank you.
ReplyDeleteMSCI stands for the Morgan Stanley indexes although the MSCI stands on its own now. It is simply a family of indexes that undergo weight rebalancing so traders strive to mimic the changes for their portfolios, so a wild swing in stocks up and down may occur in the final one-half hour as positions are tweaked one way or the other.
DeleteA 40-50 handle move up would probably put in a nice negative divergence point in the 30, 60 and daily charts but not the weekly. But the reverse would set-up a nice future neg divergence for all charts with the next leg up. Today, will we get the faux break in the last 30 mins of trading? My WAG is we will finally break Turn around Tuesday next week unless Monday does all the damage by itself. J
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