Stock chart patterns and technical analysis (TA) explained simply. Disclaimer: This blog and all its contents are for educational and entertainment purposes only. Do not trade or invest based on any information seen on this blog. Please read Terms of Service. The K E Stone blog sites (Keybot the Quant) are blacklisted by Google, so enjoy the ad-free experience, and only use the Donate button when supporting the sites.
Pages
▼
Thursday, May 2, 2013
SPX 30-Minute Chart 8 MA and 34 MA Cross H&S Pattern
The 8 MA stabbed down through the 34 MA signaling bearish markets for the hours and days ahead. The 8 MA is at 1587 so as long as the SPX stays under 1587 the bears are in good shape. The bulls are obviously trying to launch markets higher again to reverse the 8/34 cross so they can take the SPX above 1600. The red lines show the negative divergence we watched set up over the last few days. The drama results in three negative divergence spank downs (red arrows); the last one resulting in the drop to the current closing print at 1583. The MACD and RSI maintain a more bearish stance while the stochastics and money flow are agreeable to a quickie bounce today. The RSI is not oversold as yet so additional price action to the downside would be anticipated moving forward. A lot depends on if Draghi (ECB) announces any new monetary programs at the press conference only minutes away. The H&S pattern is in play and even though the right shoulder printed at the same highs as the head at 1597-1598, let's call it a Quasimodo H&S and consider it in play. The neckline at 1579 support targets 1560-ish and the 1576 neck line targets the strong 1552-ish support. The strong areas of support below are 1576, 1563 and 1552-1553. The 8 and 34 MA cross is the most important thing to watch on this chart. 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 1:20 PM: The 8 MA moves above the 34 MA at noon time signaling bullish markets for the hours and days ahead. The bears are not allowed to shine. The bears need to push the SPX lower, under 1594 and lower, to get the 8 MA to curl back over to the downside. The bulls are cruising today recovering all of yesterday's losses.
As always, you have to make all the decisions yourself TW. But, looking at PAY weekly, it has been hated for the last few months, stocks that take waterfall drops you have to watch out for and it is typically best to give them lots of time to settle. The RSI has never reached oversold as yet, the bounce over the last two weeks is a positive divergence bounce. PAY daily shows the April bounce but price was barely at an equal low compared to February, so it is not officially positive divergence that bounced price. It is a cheesy low. That is quite a ceiling of resistance at 22, up through that and the recovery is in place. PAY may be more sideways ahead and there is a concern that another shoe of bad news may drop. It is worth watching but there are better plays than that available right now.
HL is a miner, the most beaten down and neglected sector this year, Keystone is favorable on all miners moving forward. After such a drastic drop they may bounce sideways for a while but overall the worst should be over. They all may need to print a double bottom during the couple weeks ahead so that may provide a great time to bring on some miners long. The 80/20 rule says 2's lead to 8's, so a break of HL 3.2 would hint that 2.8 may be on tap. Probably best to watch it for next few days, the 2.7-2.9 may be an ideal entry but since it is difficult to call bottoms, and if the fundamentals look good, a scale-in strategy may be perceived to buy at 3.2, 3.0 and 2.8. It would be a strong guess that HL should be available at 2.7-3.1 over the next week or two which may provide a nice long opportunity. The deflationary outcome is important moving forward since if very troubled times do occur moving forward, everything will move down but miners and shippers will likely drop less since they have already paid a lot of dues.
KS, is this market ever going to drop, everytime, we keep expecting this drop but it never seems to come, all the technicals, H$S etc signalling a drop is not working, or am I just impatient, all I see is it keep climbing higher?
All the shippers appear interesting and are actually more attractive as a bottom call than the miners.
The markets are remarkable these days, very reminiscent of Sept/Oct 2007. The tops are two to three month affairs sometimes longer. The SPX is moving through 1540-1600 for the last two months. The recent high prints at 1597-1598 are all key right now, and today's HOD 1597.86. The bulls may want to push to the 1620-1630 area to top out things if 1598 gives way; the current 1598 is important.
KS,
ReplyDeleteCould you please look at PAY and HL?
I would think that these stocks would look bullish to you, based on their large price moves down and potential positive divergences.
thanks,
TW
As always, you have to make all the decisions yourself TW. But, looking at PAY weekly, it has been hated for the last few months, stocks that take waterfall drops you have to watch out for and it is typically best to give them lots of time to settle. The RSI has never reached oversold as yet, the bounce over the last two weeks is a positive divergence bounce. PAY daily shows the April bounce but price was barely at an equal low compared to February, so it is not officially positive divergence that bounced price. It is a cheesy low. That is quite a ceiling of resistance at 22, up through that and the recovery is in place. PAY may be more sideways ahead and there is a concern that another shoe of bad news may drop. It is worth watching but there are better plays than that available right now.
DeleteHL is a miner, the most beaten down and neglected sector this year, Keystone is favorable on all miners moving forward. After such a drastic drop they may bounce sideways for a while but overall the worst should be over. They all may need to print a double bottom during the couple weeks ahead so that may provide a great time to bring on some miners long. The 80/20 rule says 2's lead to 8's, so a break of HL 3.2 would hint that 2.8 may be on tap. Probably best to watch it for next few days, the 2.7-2.9 may be an ideal entry but since it is difficult to call bottoms, and if the fundamentals look good, a scale-in strategy may be perceived to buy at 3.2, 3.0 and 2.8. It would be a strong guess that HL should be available at 2.7-3.1 over the next week or two which may provide a nice long opportunity. The deflationary outcome is important moving forward since if very troubled times do occur moving forward, everything will move down but miners and shippers will likely drop less since they have already paid a lot of dues.
KS,
ReplyDeleteThanks for sharing your views on HL and PAY!
With respect to the shippers, do you think these stocks look interesting?
DRYS, DSX, EGLE, EXM, FREE, FRO, GNK, TOPS
And, what about the shippers with a yield , like:
BALT, GLNG, NAT, NM, SB, SFL, SSL, SSW, TGP, TK, TNK, TNP, TOO, VLCCF
many thanks,
TW
KS, is this market ever going to drop, everytime, we keep expecting this drop but it never seems to come, all the technicals, H$S etc signalling a drop is not working, or am I just impatient, all I see is it keep climbing higher?
ReplyDeleteAll the shippers appear interesting and are actually more attractive as a bottom call than the miners.
ReplyDeleteThe markets are remarkable these days, very reminiscent of Sept/Oct 2007. The tops are two to three month affairs sometimes longer. The SPX is moving through 1540-1600 for the last two months. The recent high prints at 1597-1598 are all key right now, and today's HOD 1597.86. The bulls may want to push to the 1620-1630 area to top out things if 1598 gives way; the current 1598 is important.