SPX 60-Minute Chart 200 EMA Cross Bull Flag Pattern Negative Divergence Developing

This is an important chart today that will tell you if the relief rally has legs, or not. The SPX is under the 200 EMA at 1948.72 signaling bearish markets for the hours and days ahead, however, the bulls are pushing and pushing to overcome this key level to take over market control. The green falling wedge, oversold conditions and positive divergence (green lines) create the bounce that started Friday morning. The dip-buyers and long traders are enjoying the bull flag pattern in blue. The first leg is 1910 to 1945 about 35 handles. The second leg begins at 1927-ish after the sideways to slightly lower textbook consolidation flag forms. The target is 1927+35 = 1962, call it the key 1960-1963 resistance. Key S/R is shown by the brown lines at 1968, 1963, 1960-1961, 1949-1951 and 1924.

Price is teasing the 200 EMA for the last five candlesticks, five hours, with neggie d on the RSI, histogram, stochastics and money flow, however, in the very near term the RSI can bust a move higher and move to the overbot level and money flow and the MACD line remain long and strong (short green lines). Therefore, 1 to 3 candlesticks (1 to 3 hours of trading) are needed to potentially form the universal neggie d required to turn price to the downside. The bulls have to be given the edge and since they are so close to the critical 200 EMA at 1948.72 a touch is very likely. Strong horizontal resistance is 1949-1951 as previously discussed so this zone is a very important market inflection point. Bears win moving forward under 1948 and lower. Bulls win at 1951 and higher. 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 9:33 AM: The SPX punches up through the 200 EMA at the opening bell signaling bullish markets for the hours and days ahead. Price is battling the 1949-1951 resistance gauntlet. Can the bulls maintain this level and punch above 1951?

Note Added 8:01 AM on 8/15/14: The bulls punched the bears in the face yesterday. The SPX closes at 1955.18 well above the 200 EMA signaling bull victory ahead. Just as the SPX had to come up to back kiss the important 200 EMA from the underside, price will now have to back test the 200 EMA from the top side at some point forward. Keep watching the critical 200 EMA now at 1948.55.