SPX 1-Hour Chart 200 EMA Cross

The bulls mount a big comeback rally off the lows early Friday morning due to rosy news in Ukraine and Russia, more PBOC stimulus on the way and Fed Vice Chair Fischer espousing dovish talk which means ZIRP Forever will last, well, forever. The failure of the critical 200 EMA on the 60-minute chart ushers in further market weakness and the bears remain in control overall. A back test has been required ever since the 200 EMA failure and price is now climbing to perform that back kiss at the 200 EMA at 1950.15 and falling.

The SPX is following the notes from Friday. The bulls punch up through 1937 R so 1940-1942 resistance is next which is where the fight is now. Note the dollar/yen is at 102.10 continuing to bump up against this critical resistance level. Above 102.10 and the stock market will catapult higher. Below 102.10 and equities will leak lower. The chart above shows long and strong indicators across the board so higher highs are expected after any minor pull backs. The 2-hour chart is also agreeable to more highs so a few candlesticks will need to print before negative divergence can develop. Therefore the test of the 1950-ish level appears likely sometime today or early tomorrow. If 1942 is taken out, 1949 R becomes the next target for price. At 1949-1951 trumpets will sound since a major bounce or die decision will occur for the stock market that will identify a several day, or longer, trend ahead.

The red lines show the neggie d spank down from the rising wedge. The green lines show the possie d launch off the falling wedge. The key S/R is 1960-1961, 1949-1951 and 1924. More specifically, 1949-1951, 1942, 1940, 1937, 1931 (August starts here), 1925 and 1924. Bulls win big up through 1949-1951 since the 200 EMA cross will be positive; until then, the bears remain in control. The SPX is now printing 1941.23. If the bulls run up through 1949-1951 some caution may be warranted since the 1960-1961 resistance is very strong. So a move through 1950-ish will likely target 1960-ish, so another 10 points of upside, but the fight at 1960-1961 would be another major market bounce or die decision point.

Keybot the Quant remains bearish and is fixated on the UTIL 543.81 and JJC 38.92 levels, utilities and copper, respectively, as the main market directional drivers today. UTIL punched above 543.81 to begin the day but fell back under now at 543.31 causing market bearishness. JJC is 38.87 only one nickel from the 38.92 that the Keybot algorithm identifies as a key bull-bear line in the sand. Thus, bears are fine if UTIL and JJC remain in the bear camp. If one or both turn bullish, the SPX will begin climbing strongly higher. If both parameters turn bullish, Keybot the Quant will likely flip long. 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 11:18 AM:  SPX punches through 1942 R so price will want to target 1947 R next as well as the 200 EMA at 1950-ish. UTIL is pennies from 543.81 trying to punch higher. Ditto JJC at 38.88. Bulls are making a strong push. Watch utilities.

Note Added 11:23 AM:  SPX is nearing 1945 but UTIL is not yet above 543.81 and JJC not yet above 38.92 to bless the move. TRIN is 0.93 only a hair under one giving the bulls the advantage but not overwhelmingly. The VIX drops under 15 then under 14 now at 13.77 so the Fed sends volatility lower to send stocks higher. The dollar/yen is 102.14 trying to push through the 102.10 resistance level. Equities are at an important inflection point right now. The Keybot algo is also identifying financials right now, XLF 22.53 as a key bull-bear line in the sand with price at 22.48 on the bear side but only a nickel away. The bulls can create a huge rally using copper, utilities and financials as fuel; it is on a silver platter if they want it.

Note Added 7:15 PM: The platter must have been silver-plated rather than solid silver since the bulls did not want it. UTIL came up to threaten 543.81 again and slipped on a banana peel falling down the basement steps. Copper weakened today so JJC could not achieve 38.91. XLF, financials, could not attain 22.53. Thus, the air came out of the bull's balloon as the session proceeded. TRIN is 1.05 neutral on the day at one unwilling to choose a side. The drop in volatility created the market lift. Dollar/yen is elevated at 102.22 breaking out above the recent 102.10 ceiling so the weaker yen creates stock market lift today. The market bears need to push the dollar/yen under 102.10 as soon as possible, otherwise, the bulls will be yelling "Banzai!" as they buy stocks on the long side with the weak yen (due to BOJ money printing). The 1-hour and 2-hour SPX charts show the MACD line remaining long and strong so a move back up to SPX 1945 cannot be ruled out but negative divergence should appear when price prints a higher high compared to today. Tuesday appears to be a pivot day so one side or the other will win tomorrow and set the trend forward. The bears held their ground today. Bulls need UTIL 543.81, JJC 38.91 and/or XLF 22.53. Any 1 of the 3 will create stock market upside. 2 of the 3 will likely cause Keybot the Quant algorithm to flip long. If all 3 remain in the bear camp, markets will weaken. Bears receive downside fuel with RTH 59.51. The SPX stopped at the 1937 S/R to spend the night and think things over.