SPX 60-Minute Chart 200 EMA Cross Inverted H&S Bull Flag Rising Wedge Negative Divergence Developing

The key SPX support and resistance is 1960-1961, 1958, 1951, 1942-1943 (62% Fib for the drop from 2019 to 1820), 1936-1937, 1928, 1924 and 1910. Price gapped-up today creating an island above 1910 and higher. The important moving average support gauntlet is at 1892-1913; this range engulfs the 200-day MA at 1907, 10-month MA at 1913, 12-month MA at 1898 and the 50-week MA at 1892. Price prints a HOD at 1942.45 testing the 1942-1943 resistance level.

The 200 EMA cross is a key VST indicator for market direction and the bulls dealt a fatal blow to bears today. The SPX moves above the 200 EMA on the 60-minute at 1937.68 signaling bullish markets for the hours and days ahead. This represents multiple nails in the bear's coffin. Since the 200 EMA cross occurs today, the bears have a chance on Wednesday, if they bring their 'A' game, to spank the SPX under 1938 and reclaim victory for the hours and days ahead. The bears have been in charge with price under the 200 EMA since late September until today. Watch 1937.68 since it tells you the path ahead.

The 62% Fib is 1942.88 (see previous chart). The HOD is 1942.45. How do you like those apples? You can see how the Fibonacci's matter. Tomorrow decides if price wants to poke up through the 62% Fib and move far higher, or, if the 62% Fib holds to allow the bears to growl again.

The brown lines show an inverted H&S in play with head at 1830, neck line at the strong 1897 S/R; this is 67 points difference that targets 1964. The 1960-1961 is very strong resistance so price may want to seek the 1960-1964 area to satisfy the inverted H&S. The neon blue lines show a bull flag pattern first leg 1820 to 1900-ish call that 80 points, then sideways to sideways lower consolidation, then the second leg begins from 1880 so 1960 is targeted by this pattern also. If 1830 is used as the starting point for the bull flag, a target of 1950 is calculated, call it the strong 1951 resistance. The purple lines show a rising wedge pattern which is bearish. The short red lines for the indicators show negative divergence that wants to see a spank down in price, however, the green lines show long and strong profiles for the MACD line and the RSI is squeezing out a tiny bit more juice, so price will want to come back up for another higher high after any pull back occurs in this one-hour time frame.

Therefore, universal neggie d should develop across all indicators in about 2 to 5 candlesticks which is 2 to 5 hours of time. This would equate to 2 or 3 of the 2-hour candlesticks (reference previous chart) and may or may not be quite enough time for the 2-hour chart to set up for the downside. Since the MACD line wants higher prices, and the SPX already printed near 1943 R, the bulls may be able to at least squeeze out 1951 R before topping, rolling over and reversing.

If equities begin running higher again on Wednesday the 1960-1961 level will likely become the target. Bears will be able to reexert themselves as long as price stays under 1943 (the 62% Fib). Above 1943, and the 62% Fib (for the 2019 to 1820 sell off) gives way, and price will target 1951 heading higher probably to the strong 1960-1961 resistance level.

Keybot the Quant is long and identifies XLF 22.90 (financials) as a major bull-bear line in the sand for Wednesday. The XLF begins at 22.87 only three pennies away causing bearishness. Thus, financials hold the key for the market path ahead. Like Caesar standing at the Colosseum, extending his arm and providing a thumbs up or thumbs down, to determine the fate of the gladiators, that is what financials will do on Wednesday. If XLF pivots above 22.90, the bulls will not look back. The party will be in full gear and the stock market will continue higher with a sustainable upside move ahead. The SPX will target 1951 then 1960-1961. If XLF stays under 22.90 and leaks lower a top is in for the stock market in the near term.

Thus, watch the SPX resistance levels at 1943, 1951 and 1960-1961. Watch the 200 EMA at 1937-1938. If price stays above 1937-1938, the bears will fold like a cheap suit. Watch XLF 22.90. Market bulls win big if XLF moves above 22.90. Bears win big and stop the market upside if XLF stays under 22.90. Listen for any bank news overnight that may impact the XLF when trading begins on Wednesday. The bulls severely crushed the bears today. 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.