SPX 30-Minute Chart 8/34 MA Cross Positive Divergence

The SPX is teasing around the following S/R; 1936-1937, 1931.11 (150-day MA), 1924, 1920, 1910.99 (10-mth MA), 1910, 1905.30 (200-day MA) and 1897.01 (12-mth MA) the cliff. The bottom about five hours ago (each candlestick is one-half hour), at 1912.84 (LOD), results in a bounce due to the positive divergence (green lines), oversold conditions and the falling wedge pattern. The MACD line in the VST was not happy with the bounce (short red line) and would prefer to see a test of the low price again. The MACD lines are beginning to cross, however, so the MACD line may end up saying the bottom is close enough for government work. However, the expectation would be for a test of the critical 1910-1912 support perhaps before the closing bell.

The dark green lines should hold firm in the right margins if price comes down to print a lower low at 1910-1912. This would result in possie d across all indicators including the MACD line and set up the next bounce which should be more sustainable for a rally for a day or three. At that time, you will have to see if a positive 8/34 cross occurs to sustain the upside. The expectation is for price to come down either this afternoon or on Monday and bounce from 1910-1912.

The 8 MA is under the 34 MA signaling bearish markets for the hours ahead. The 8 MA is 1924.80 so if price stays under here the 8 MA continues lower and bears rejoice for more mayhem ahead. If the SPX prints above 1924.80 and moves higher the 8 MA will curl higher for a potential positive 8/34 cross in the hours ahead creating bull fun. 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 3:01 PM:  The SPX is testing the 1920 support...... 1920.39 ..... 1920.91 ....

Note Added 3:06 PM: Failure at 1920 so price should test the 1911 (10-month MA) next for a critical bounce or die decision. The 10-mth MA is where the market bottom was printed in February this year that saved the day. Treat it with respect. If the 10-mth MA holds, bulls will be fine. If the 10-mth MA fails, markets are going down the rabbit hole. ...1918 .....1917 ...... 1916.67 .....

Note Added 3:11 PM: The VIX spiked to 22 today showing fear. The TRIN is at 1.35 with a HOD at 1.61 and yesterday was over 1.50 and the day before spiked to 2.22. For three consecutive days of high TRIN's, this would be in agreement with the technical analysis above and the bounce scenario for SPX. The SPX 2-hour chart is positively diverging but it has a MACD line in the VST that is pointing down so there may be a need for 1 to 3 candlesticks to create the bounce higher (2 to 6 hours). So, it appears the SPX should place a bottom perhaps at 1910-1912 or 1905 or perhaps 1897, at anytime now through early Monday afternoon.

Note Added 3:17 PM: SPX 1914.98 ..... 1915.39 ... 1915.02 .... 1915.55 .....

Note Added 3:24 PM: The SPX prints a low with a 1913 handle mighty close to the LOD with the 1912 handle so you can call it a matching low so the little red line shown in the chart above for the MACD line is satisfied. This may be close enough for government work. There is over one-half hour of trading remaining so lots of drama may still occur. Here we go, SPX 1914 handle now...... this is definitely a matching or you can call it lower low for the 30-minute candlesticks so the dark green lines are showing possie d as described above.

Note Added 3:28 PM: Excitement. LOD remains 1912.84. The SPX drops to 1913.77 ..... 1914.29 .... bears need to take out the LOD at 1913 and the 10-mth MA at 1911 will likely fail...... 1913.36.... woo baby ....... 1914.49 .... bulls are hanging on by a sliver.

Note Added 3:31 PM: SPX 1914.66 .... 1913.98 ..... 1913.42 .... 1913.29 ..... bears have it on a silver platter if they want it...... 1913.56 ..... here it goes .... 1913.06.... 1913.00 ......16 pennies from the LOD .......

Note Added 3:34 PM:  SPX 1912.38; the LOD fails..... 1912.30 ....

Note Added 3:36 PM:  Bulls are pushing hard to try and hold the line and prevent potential catastrophic failure....... 1913.47 ... 1913.88 ..... 1914.11 .....

Note Added 3:46 PM: SPX is 1911.00. The 10-month MA is 1909.95 call it 1910. This is the same test that occurred in February eight months ago that resulted in a major market bottom. What say you this time markets? The old-timers and algorithms are watching 1911 like a hawk....... this is a big-time decision for markets....... bounce or collapse.

Note added 3:50 PM: Failure of the 10-month MA at 1910. Markets are in serious trouble.

Note Added 3:51 PM: The clock may run out for bears. Price is at 1907 flushing 3 points immediately when the 1910 failed. The 200-day MA is 1905.24. Markets weighted to the sell side for the final minutes .... 1908.62..... LOD is 1907.95..... the positive divergence shown by the dark green lines above in the chart is holding for the bulls..... 

Note Added 3:55 PM:  Price is printing new lows..... 1907.72 .... 1907.55 .....

Note Added 4:03 PM:  SPX ends at 1906.13 still settling out less than one buck above the 200-day MA at 1905.22 but more importantly the 10-month MA at 1909.46 failed for the first time since November 2012. The 12-month MA is 1895.73 so the 1894-1896 level is the cliff edge for the markets the very last chance the bulls would have to save the day. Uber strong price support is at 1897, 1891 and 1889. Marrying this with the 12-month would place an epic final line in the sand at 1894-1897. At this level, markets are lost down the rabbit hole and enter a guaranteed cyclical bear pattern for many months even one or two years ahead. But if the bulls can tread water above 1894-1897, they can stage a recovery rally and fight off the growling bear. The SPX minute and hourly charts as discussed above likely want to see a bounce on Monday. TRIN ends at 1.44 and it will want a rest (print under 1.00 on Monday in the bull camp) from the strong three days of negativity as well.  UTIL ends at 562 and this will provide the bulls an advantage on Monday morning (reference Keybot's site). World events will be important over the weekend. Barring any serious world event the expectation would be for equities to bounce early next week. There will be lots to look at this weekend. For now, Keystone will take a couple heart pills and sit in the easy chair enjoying some fresh pumpkin pie.