SPX S&P 500 60-Minute Chart 200 EMA Cross Island Reversal

Keystone was warning about the potential failure of the 200 EMA on the 60-minute at 2171. It failed and price never looked back. Markets will be bearish for the hours and days ahead as long as the SPX remains below the 200 EMA at 2171 and moving lower.

The indicators are weak and bleak but oversold so a bounce is needed in this hourly time frame. Typically price would bounce and then roll back over to the downside again for a lower low due to the weak and bleak MACD line. At that point, in this hourly time frame, a more substantive relief rally may begin.

The full moon, the Harvest Moon, is on Friday and stocks are typically bullish through the full moon. OpEx is this week and stocks typically rally from a Tuesday low to a Wednesday high during OpEx week. So a mosaic develops, only based on the seasonality factors, where weakness in stocks may continue into Monday afternoon and Tuesday morning, then a recovery through Wednesday, then another quick dip on Thursday, but then a recovery into the weekend. Of course news events always override seasonality factors.

The brown lines show the gap up in early September that created an island (brown circle); you can call it Gilligan's Island. Price fell and gapped back down through the same gap creating the island reversal pattern. Pay attention to the 200 EMA especially as the new week of trading progresses. 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.