SPX S&P 500 30-Minute Chart 8/34 MA Cross Oversold Falling Wedge Positive Divergence

A key short-term market signal is the SPX 8/34 MA cross on the 30-minute chart. The bears create a negative cross at New Year's eve and they bludgeon the bulls ever since. The 8 MA is under the 34 MA signaling bearish markets for the hours ahead. Last week was the worst start for the stock market in history. The SPX 30-minute chart, however, is set up for the bulls and a relief rally. The falling wedge, oversold conditions and universal positive divergence point to a rally in this 30-minute time frame.

The 1-hour chart is set up the same way so it would like to see a recovery rally for the stock market. The 2-hour chart is also setting up with positive divergence but is not completely set up as yet. Keystone posted the 2-hour chart last week waiting for it to set up properly for the bulls. Thus, a few hours more time is needed for the 2-hour chart. So the shorter tern charts should bump price higher early in the session on Monday, then price will languish lower again to satisfy the 2-hour chart, then the SPX should place a near-term bottom say late Monday morning or early afternoon, and then a rally should begin into Tuesday maybe into Wednesday.

Bears are fine as long as the 8 MA remains under the 34 MA. When the 8 MA crosses above the 34, that is the all-clear signal for the bulls and a strong recovery rally has begun. There are always bags of money waiting to be invested for the new year but this year the bears have been slapping markets lower from the get-go. Therefore, this pent-up cash should help boost markets to create a recovery rally. Everyone is short the market becoming very afraid last Friday. Fred, the doorman, said he took his entire life savings and went short the market on Friday. So lots of shorts may create a strong rally then the new money comes in both may create a very sharp and fast rally. 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 Sunday evening in the States; Asia trading is underway: US futures start out weak. S&P -12. Dow -100. Nasdaq -22. It will be interesting to see if conditions improve overnight and the chart patterns discussed above play out for Monday. Weak futures may persist and that may create the bottom for the near-term on Monday morning. Australia's ASX 200 is tanking -2% and the KOSPI is down -1.7%. Japan is closed for 'Coming of Age Day'. Everybody is quickly aging watching these volatile and erratic markets.

Note Added 8:15 AM EST Monday morning, 1/11/16: US futures recover overnight to S&P +13. Perhaps that possie d highlighted above is ready to kick into high gear.