Two stories (2011-10-11 SPX analysis)

Looks like the two charts with various time-frames of S&P500 Index are telling different stories.

Daily chart of SPX:















Weekly chart of SPX:
















So basically, on daily chart, we can see an obvious MACD divergence and bullish cross. These are pretty nice indicators telling us that the index is going to surge.

The index almost reaches the upper line of its channel. The range is quite large, so it is relatively difficult for SPX to break out. Strong resistant area is at around 1200-1210.

On weekly chart, instead of signaling any spiking possibilities, the chart actually signals further slumps.

Orange dotted line was the previous upward trend line, SPX was rising gradually along this line. Then, in August 2011, the index broke the trend with an extremely long black candlestick. This told us that the bullish trend has ended.

So given S&P500 index is moving under bearish trend now, the red flag actually becomes a bearish continuation flag. Such pattern signals further drop.

Indeed, MACD shows no bullish cross or divergence on weekly chart. So on a medium-term view, the index is still not considered as being under bullish trend. Chance for falling is higher.

This lets us go back to Hang Seng Index. Though yesterday the index broke the Pitchfork easily and closed above 18,140, if US markets are not going to rocket, HSI is less likely to surge greatly too.

Let's spend one more day to observe how HSI would go!