SPX 2-Minute Chart Price Loses 12-Month MA Ushering in Cyclical Bear Market

Keystone warned about the 10-month MA at 1906.32 failure last week. This set up the run for the 200-day MA at 1905.39 which failed today. One of Keystone's key cyclical market signals is the SPX 12-month MA cross which now ushers in a cyclical bear market. In addition, this is "the cliff" as Keystone often refers to it and a flush would be expected once it failed. At 3:20 PM EST-ish the SPX failed at the 12-month MA at 1893.11 and note the back kiss where the bulls were desperately trying to recover to prevent the failure. The back test was successful and price collapsed 20 points in the remaining one-half hour. The 50-week MA at 1888.16 failed which was icing on the cake for the bears.

The collapse of 31 points, -1.7%, is a small surprise. The recovery bounce was occurring as the buy-the-dippers came in creating a short-covering rally but instead of lasting a day or two the sell-the-rip's crowd rushed in and jammed markets lower. Ebola fears increase sending airlines, restaurants and travel stocks lower. Semi's continue to receive daily beatings. The technical's are affecting markets as shown by the 20-handle collapse once the SPX went off the cliff at the 12-month MA.

Watch the key moving average levels on the way back up. If the SPX stays under the 12-mth MA at 1893.11, market bulls have absolutely no hope going forward. The degree that price overtakes the moving averages above on the way back up will tell you the strength of the recovery rally ahead. 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.