Look at the thick Exponential Moving Averages (EMA's) on the . They are crossing and looking VERY . The Red is 50 . The blue is 14 . These indicators are EXTREMELY powerful. A cross to the downside is referred to as the "Death Cross," but there is no general name for when it crosses to the upside. We'll just call it The "Bullish Cross."
When this cross happens in either direction YOU ARE SILLY to trade against it. The trend is in the middle of changing direction and NOW is the time to watch these markets like a hawk and be prepared to put money to work or pull it to safety.
This cross does not mean we are clear from opposing pressures! All professionals that trade off these EMAs know that the cross means one thing. Price is ABSOLUTELY due to test the general area of these EMAS. The rationality behind this is, since the indicators are easy to use, everyone sees the crosses happen (CNBC.) This causes impatient and new traders to jump in and we know these markets are DESIGNED to take newbie money. Looking at how the market closed this weekend certainly indicates a trap to me. I always expect price to make large moves in the other direction after markets close in a very directional state for the weekend.
So, at the end of the week/month, I expect S&P to be higher. But not before stopping out as many newbie traders as possible. Be prepared for pullbacks to be bought up. I particularly like the 2704 level. Its a STRONG cluster of fibo levels that we've identified plenty of times. Below that 2685 is another decent level. Below this we have our EMAs down at 2677ish level. As a rule of thumb we should not be surprised if the market tests this zone. DO NOT PANIC.
There is also another variant that the market just rocketships from this point and leaves everyone behind but I don't think its very likely until the cross becomes more confirmed.
Be prepared for some juicy action this week. I am slobbering at the opportunities that lie ahead. I'll also let you in on this tip, check out the EMAs on the Nasdaq and I think you'll understand my passion here. I will not hold back getting long if we get our pullback and the EMAs have not quite finished crossing yet on S&P .
I'll try to post entries and exits but sometimes I am far to busy. Forgive me and Good Luck!
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