SPX 30-Minute Chart 8/34 MA Cross
The bears finally flex their muscles on Friday at 1:30 PM pushing the 8 MA under the 34 MA to usher in market weakness for the hours ahead. The two green ascending triangles led to bullish outcomes as would be expected, just as the red descending triangle sent price to 1710 on Friday. The triangles are all played out now. The brown lines identify key S/R at 1730, 1725-1726, 1722, 1710, 1705-1706, 1698-1700 and 1691. The indicators are mixed, MACD line and money flow are weak and bleak wanting to see another price low after a bounce, while stochastics and the histogram want to create the bounce. S&P futures point to a flat to slightly weaker open so a test of the strong 1705-1706 support may be on tap. The chart hints at sideways indecision ahead. Watch for a potential sideways channel to develop using a set of brown lines as upper and lower limits. The bears will create weakness in equities as long as the 8 stays under the 34. 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 3:40 PM: SPX drops from 1710 to 1698 support after the opening bell, then staggers through the sideways range of 1698-1706 all day long.
This is how I see it KS, the bulls need some serious rocket fuel to move equities any higher than they are right now. The FED came in with a stunning move to maintain the crack cocaine free money policy; and upon hearing that news, equities posted a ~30 point gain that quickly fizzled out in the following two days.
ReplyDeleteIf continued QE4 easing was not enough to drive equities into a real rally, then why would they surge up now on some weak data? The market already showed us that even with the promise of QE4, the reaction is not very euphoric. I think QE4 is losing some steam, I think the uncertain guidance from the FED is hampering equities, and until we get definitive information from the FED, equities should drift sideways to sideways lower. To be honest, I dont think the bull run is over because I think the FED will launch QE5 next month at $105 BB per month. The data will not improve in 30 days and in order to maintain the wealth effect, the market needs more stimulus.
FeS2
There will probably be a global trigger. In February-march, commodities crumbled and instead of dragging markets lower, easy money sent them higher. Then Japan looks like a candidate as a negative catalyst with an incident in the JGB's but alas, time moves along and everyone whistles a happy tune. Watch Portugal and the Portugal-Spain zone. Now that the German election is history, drama in Europe may heat up, and Portugal may be the catalyst, the mouse that roars. A global event would cause a cascade reaction where ripples go round and round from Europe to the U.S. to Asia to Europe to the U.S. to Asia to Europe .....
Delete