SPX 60-Minute Chart 200 EMA Cross Sideways Channels Lower Band Violation

The SPX remains above the 200 EMA at 1981.10 on the one-hour chart signaling bullish markets for the hours and days ahead. Bad things will happen to the stock market if the 1981 fails. Yesterday's low bounced off the strong 1985-1986 support. Key S/R is 2005, 2002-2003, 1998, 1991, 1988, 1985-1986 and 1973. The 1980 and 1982 levels are support levels within the stronger structure listed and considering the 200 EMA is 1981.10, the 1980-1982 level takes on significant support importance as well.

Price has violated the lower standard deviation band so a bounce would be expected like the prior violations within a day or three. The green lines show positive divergence for the histogram and stochastics which want to bounce price in this one-hour time frame. The other indicators are more open to lower lows in price so a test of the strong 1985-1986 is likely and if that fails, the big enchilada test occurs at the 200 EMA which will dramatically affect the stock market moving forward.

Three weeks ago the bears tried to stab down through the 200 EMA but instead they were slapped in the face and the bulls continued higher. The chart hints at sideways ahead perhaps through a 1985-1998 sideways channel. Since the Fed is on tap next Wednesday, and there is now talk about a rate hike sooner rather than later, the stock market may start to line out sideways into that drama. Fed Chair Yellen will extend her arm next Wednesday and point up or down with her thumb determining the fate of the markets. Bulls are fine if they stay above 1981. Bears will begin biting off chunks of bull meat with blood and carnage accelerating if the 1981 fails. 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 12:06 PM: Lots of price drama today using the S/R levels above. Note that VIX has moved above the 200-day MA at 13.56 a very bearish signal. Markets will deteriorate if the VIX stays above 13.56. The bears cannot make headway lower since the bulls are maintaining buoyancy in the financials with XLF a touch positive. The TRIN sits at dead neutral at 1.00 unable to choose a winner in today's trading. SPX LOD 1982.99 so a 1982 handle prints teasing the 200 EMA described above now at 1981.33. Bears will win big if they keep the VIX above 13.56. The bulls must send volatility lower immediately or they will lose today. The beat goes on.

Note Added 12:29 PM: VIX falls through the 200-day MA at 13.56 so the bulls push the SPX up through the strong 1990-1991 resistance and the path in the chart above is playing out. Watch the VIX 13.56 level today as the main rudder steering the market ship. Bears will receive lower equities with VIX above 13.56. If VIX stays under 13.56, then equities stumble sideways with an upward bias.

Note Added 12:32 PM: SPX 1992.19. VIX 13.47. Bears need VIX above 13.56 to receive extra juice. XLF 23.32. TRIN 0.93. The lower VIX and TRIN off of today's intraday highs drives the stock market higher.

Note Added 7:08 PM:  The SPX plays out as the lines in the right margin of the chart showed this morning. Indicators have recovered and are long and strong in the short term so more upside for a few hours is a reasonable expectation. The bears made a run lower by pushing the VIX above the 200-day MA at 13.56 creating excitement in the morning but then VIX collapses down to 12.88 providing bull fuel all day long. A VIX above 13.56 will signal market carnage ahead. The VIX remains above the critical 12.34 level identified by the Keybot the Quant algorithm so market bears are fine. The bears have not yet tested the 200 EMA now at 1981.73. The 20-day MA is 1988.49. The SPX may stagger sideways. The Fed decision is now only 4-1/2 trading days away. Financials helped the bulls today.