SPX S&P 500 60-Minute Chart 200 EMA Cross Expansion (Megaphone) Pattern

The SPX comes up to fill the gap from mid-month as the previous 1-hour chart highlighted. The SPX remains above the 200 EMA on the 60-minute at 2093.65 signaling bullish markets for the hours and days ahead. The battle continues, however, with price only three points above and S&P futures are down -7 in front of Wednesday's trading. The bears need SPX under 2094 or they got nothing.

Usually, the 200 EMA crosses are much more infrequent but the chart shows how the bulls and bears are taking turns punching each other in the face. The bulls are winning now. Price is teasing above and below the upper trend line. The purple trend lines form an expansion pattern lower; also called a megapone pattern (the mouthpiece and handle for the megaphone are shown). The bulls need price to breakout  to the upside and avoid the megaphone pattern from playing out.

The bears need price to slip under 2094 to prove that downside selling is beginning. Then the bears will be targeting the lower trend line of the megaphone down at 2015-2030. The indicators are not tipping their hand. The red lines show how the weakness began in price five hours ago with negative divergence (although price did not exactly print a matching or higher high as is required). The MACD cross is negative favoring bears. Bears need the RSI and stochastics under 50% in bear territory to prove that lower is the direction for price ahead. Bulls need the RSI to stay above 50%.

CPI is released shortly. FOMC Minutes are released at 2 PM EST this afternoon which may send stocks violently one way or the other. Until then, price may tease above and below the critical 2093.65 level. Keybot the Quant algo remains long and is tracking VIX 13.48 as a key bull-bear line in the sand. VIX begins at 13.79 in the bear camp causing stock market weakness. Thus, if the VIX climbs above 14 and continues higher, the bears win with the SPX collapsing under 2094. If the VIX drops under 13.48, the bulls will begin slapping the bears around since a stock market rally will occur. 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 Thursday evening, 8/20/15: The bears came to play beating the bulls silly stocks drop more than any other day this year. The SPX collapses to 2035. How do you like 'dem apples? The megaphone pattern may have worked out over time with price going down to the lower trend line, but it was never expected to happen in a couple days!! The chart was annotated with the black arrows to show the collapse in stocks since late last week. The megaphone pattern played out as projected.