We have been joking in the live trading room lately over the popularity of the word “confluence” in various blog posts and tweets.. There is a reason for its over usage right now as this chart below illustrates the confluence of moving averages.
In a tight 60 point range we have the 200 DMA just overhead, the 50 DMA diving below the current price action now and the 20 DMA beginning to take on the roll of support. Last week we were made aware of a 500 EMA failure which could be quite bearish. We are up against that now too!. Frank from Pivotboss.com this week pointed out the triangle formation on the $SPX that would measure out a 1,000 point move in the direction of the breakout. So a chart to watch and one that is up on our screens at http://ttthedge.acrobat.com/traders in the live trading room. Stop in.