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

One of Keystone's important short-term (ST) and very short-term (VST) indicators is the SPX 60-minute chart with 200 EMA cross which signals whether the stock market is in a near-term bull or bear pattern. The SPX drops to 3002 losing the 200 EMA on the SPX 60-minute at 3015 so the stock market is in a near-term bear pattern.

The 3015 level is critical. Bulls will recover and the selling will not be a big deal if the SPX can retake 3015 and remain above. The longer the SPX remains below 3015, the worse outcome for stocks going forward. S&P futures are up +60 points as this is written about 3 hours before the opening bell for the US Friday regular trading session so the bulls look set to receive a temporary reprieve.

The blue lines show an island reversal pattern. Price gapped-up to form the island, hung out there for a while, and then dropped back down through the gap creating the island reversal. Price could have simply fell softly and filled the gap and if this had occurred it would not have been an island reversal but simply a gap-fill.

The CPC and CPCE put/call ratios that were uber low signaling complacency and a near-term top have only spiked moderately. Both need to move higher to signal panic and fear and a tradeable stock market bottom. Neither are there as yet.

Despite the robust selloff, the universal thinking is to buy the dip and happy times are still ahead. The bulls believe in the Federal Reserve and other global central bankers that are behind the curtain turning the wheels and pulling the levers that control the faux free market crony capitalism system.

The 3001-3015 support level is a deciding line for bulls versus bears for the remainder of the year. If the SPX moves above and remains above 3015, the bulls will be cheerful and happy for the weeks and months ahead. The bears will leave town and give up all hope that stocks will ever go down again. If the SPX drops below 3001, it is over for the stock market. Mayhem, misery and carnage will be the only three words that traders will use to describe stocks for the remainder of the year.

20-day MA = 3038
200 EMA on the 60-minute = 3015
200-day MA = 3013
10-month MA = 3011
50-week MA = 3008
SPX begins Friday, 6/12/20, at 3002
12-month MA = 3001 (the cliff-edge; it is over for the stock market if it fails)
 50-day MA 2892

The 3001-3015 support gauntlet holds the key to the stock market for this year. The SPX price sits at 3002 inside the danger zone. It is reasonable to expect price to come up to back kiss the 20-day MA at 3038 so watch that moving average to see if price remains above or below. If price back tests the 3038 and is spanked back down, that likely indicates that the 3001-3015 support zone will be tested again. 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 Monday Morning, 6/15/20, at 2:59 AM EST: S&P futures are collapsing -86 points. The SPX popped 39 points on Friday, after the near 200 point mini-crash on Thursday. The SPX is at 3041 with the 20-day MA at 3048. The bulls were unable to close price above 3048 so the back test appears successful for bears and price may collapse lower. The 3001-3016 gauntlet of support remains in play. The 200 EMA on the SPX 60-minute chart is at 3016. If 3001 ruptures, there will be Hell to pay. If futures hold for the next 6-1/2 hours, all those moving averages above are toast except for the 50-day MA support at 2903 which would become the downside target. European indexes begin trading and in the opening minutes, the major indexes such as DAX, CAC, MIB and FTSE are each down from -2% to -3%.