Monday, October 20, 2014

Screen Shot 2014-10-19 at 10.11.29 PMThe chart above is the monthly S&P 500 (SPX) and the TTM_Squeeze indicator, which represents momentum and the Keltner channel intertwined with the Bollinger Bands. In a normalized trending market, the Bollinger Band will always trade outside the Keltner Channel. This is represented on the TTM_Squeeze indicator as the horizontal green dots. However, what makes this indicator interesting are the red dots. That’s when the Bollinger Bands trade inside the Keltner channel. These occurrences are made possible by low volatility and trading ranges. When the Bollinger/Keltner component flashes a red dot, a potential volatility squeeze is in the works, which can trigger major bull and bear runs. The momentum component of TTM_Squeeze is represented by the vertical histogram. Similar to standard chart reading, momentum readings can come with divergencies. The current prognostication is the SPX is outlining a long term trading range based off the momentum component. It is currently at an extreme, but it has not yet shown any negative divergence. This supports the idea that the SPX will see new highs after it works off the overbought excess.


S&P 500 (SPX) SHORT TERM OUTLOOK: NEUTRAL

Switch back to bearish if SPX closes below 1861.96.

Screen Shot 2014-10-19 at 8.51.00 PMScreen Shot 2014-10-19 at 9.07.08 PMThe short term (and daily) SPX price flipped bullish and now it’s time to attempt to to see if this just a bullish reflex from oversold conditions or something more. If this market is still super bearish, it should not go beyond the 15 and 30 minute TDST Resistance confluence as shown by the 2 hour SPX chart. What is more probable is for the SPX to make an attempt to normalize by at least reaching the top of the down channel as shown on the 4 hour SPX. Observing the TD counts as the market unfolds will help determine market direction.


S&P 500 (SPX) SHORT/INTERMEDIATE TERM OUTLOOK: NEUTRAL

Change back to bearish if SPX closes below 1861.96, same as Short Term Outlook.

Screen Shot 2014-10-19 at 9.19.46 PMExpectations are not high for the SPX to re-start a significant rally, but it could be tradeable.


S&P 500 (SPX) INTERMEDIATE/LONG TERM OUTLOOK: BEARISH

Neutral if SPX closes above 1982.25 on October 24, 2014. 

Screen Shot 2014-10-19 at 9.33.29 PM Screen Shot 2014-10-19 at 9.34.34 PM Screen Shot 2014-10-19 at 9.36.24 PM Screen Shot 2014-10-19 at 9.37.54 PMOn the weekly charts, expectations are high that TD Buy Setups will be fulfilled on the major indices. Note that all the indices tested their respective TDST Resistance levels and weekly closes below those levels will enhance the probability equities will continue to look for a bottom. Continue watching the Russell 2000 (RUT) as a leading barometer. A weekly bullish price flip above 1119.33 on the RUT can change the landscape from bearish to bullish.


S&P 500 (SPX) LONG TERM OUTLOOK: BULLISH

Neutral if SPX closes below 1960.23 on October 31, 2014. 


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Friday, October 17, 2014

Screen Shot 2014-10-16 at 8.07.47 PMOne by one, individual equities are taking out their TDST Support levels. Next in line is Apple (AAPL). It has held up relatively well and should rally when major indices mount a rally. While it would be impressive if Apple can hold above hold its TDST level at 94.74 during the next wave of selling, it’s more likelier to see Apple correlate lower with the Nasdaq.


S&P 500 (SPX) SHORT TERM OUTLOOK: BEARISH

Switch to neutral if SPX crosses above 1874.74 (daily bullish price flip) intraday or SPX closes above 1862.53 end of session.

Screen Shot 2014-10-16 at 6.04.13 PM Screen Shot 2014-10-16 at 6.08.46 PMIf the Short Term Outlook switches to neutral today, additional shorting opportunities may come soon if the 2 hour SPX reaches upside price exhaustion or if the 4 hour SPX alternates between price flips in the days ahead.


S&P 500 (SPX) SHORT/INTERMEDIATE TERM OUTLOOK: BEARISH

Change to neutral if SPX closes above 1874.74.

Screen Shot 2014-10-16 at 7.24.44 PM Screen Shot 2014-10-16 at 7.28.49 PM Screen Shot 2014-10-16 at 7.32.25 PMScreen Shot 2014-10-16 at 7.46.38 PMThe current TD Buy Setup can still ‘perfect’ the count with another lower low with bar 8 or 9. But as mentioned in the prior post, there is a good chance it may not happen. Another reason the SPX may not ‘perfect’ the count is the Russell 2000 (RUT). The RUT already price flipped bullish with a follow through day today. This is a good indication the market will stabilize – at least for the near term.


S&P 500 (SPX) INTERMEDIATE/LONG TERM OUTLOOK: BEARISH

Unless SPX can close above 2010.40, staying bearish.


S&P 500 (SPX) LONG TERM OUTLOOK: BULLISH

Neutral if SPX closes below 1960.23 on October 31, 2014. 


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Thursday, October 16, 2014

Screen Shot 2014-10-15 at 8.44.58 PMThe belief that the CBOE 10 year Treasury Index (TNX) hit a major low back in July 2012 still holds, even with the dramatic move Wednesday morning. From the monthly TNX, the base case remains that rates are still bottoming. The game changer in this equation will be assigned to the TDST Support level at 16.14 or 1.614%. A breach underneath the TDST level will cast doubt in the long term bottom scenario.


S&P 500 (SPX) SHORT TERM OUTLOOK: BEARISH

Neutral if SPX closes above 1877.25.

Screen Shot 2014-10-15 at 8.03.01 PM Screen Shot 2014-10-15 at 8.12.07 PMWith TD Buy Countdown nearing a ’13’ on the 2 hour SPX, a full TD Buy Setup ‘9’ on the 4 hour SPX, and the long ‘hanging man’ candlestick pattern on the daily, some kind of bounce is still expected. With the sell off today, and the lack of price exhaustion from the longer duration timeframes, it is far from all-in buy for equities.


S&P 500 (SPX) SHORT/INTERMEDIATE TERM OUTLOOK: BEARISH

Change to neutral if SPX closes above 1906.13

Screen Shot 2014-10-15 at 9.17.11 PMUnless the designated level of 1906.13 breaches to the upside, it is prudent to allow TD Buy Setup, currently on bar ‘7’ guide the way forward. However with the severe morning selloff and the daily candlestick exhibiting a ‘hanging man’ pattern, a ‘perfected’ TD Buy Setup may not occur. If it does occur with another reversal candlestick pattern, we will notch it as a short term bottom.


S&P 500 (SPX) INTERMEDIATE/LONG TERM OUTLOOK: BEARISH

Unless SPX can close above 2010.40, staying bearish.


S&P 500 (SPX) LONG TERM OUTLOOK: BULLISH

Neutral if SPX closes below 1960.23 on October 31, 2014. 


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Wednesday, October 15, 2014

Screen Shot 2014-10-14 at 8.41.07 PMAnother sense of carnage through Google (GOOG). Google has traded under the TDST Support at 541. This sets the path to lower prices even if GOOG recovers above 541 near term.


S&P 500 (SPX) SHORT TERM OUTLOOK: BEARISH

Switch to neutral if SPX trades above 1890.41 at the 2 hour mark from the open or closes above 1874.89 at the close.  

Screen Shot 2014-10-14 at 7.58.36 PMScreen Shot 2014-10-14 at 8.03.06 PMEquities are trying to bounce. Albeit weak, the 2 hour SPX has recorded a bullish price flip, indicating stabilization. The 4 hour SPX has met the minimum for ‘perfection’ as bar 8 of TD Buy Setup has made a true low. With the final bar 9 due to record Wednesday, another dip lower before seeing an oversold bounce, is more than possible.


S&P 500 (SPX) SHORT/INTERMEDIATE TERM OUTLOOK: BEARISH

Change to neutral if SPX closes above 1928.21.

Screen Shot 2014-10-14 at 8.22.53 PM Screen Shot 2014-10-14 at 8.24.59 PMThe daily SPX TD counts are still ongoing. Unless it price flips bullish, further selling still reigns. Also keeping an eye on the Russell 2000 (RUT) in case if the SPX lags. If the RUT price flips bullish, the SPX may soon follow.


S&P 500 (SPX) INTERMEDIATE/LONG TERM OUTLOOK: BEARISH

Unless SPX can close above 2010.40, staying bearish.


S&P 500 (SPX) LONG TERM OUTLOOK: BULLISH

Neutral if SPX closes below 1960.23 on October 31, 2014. 


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Tuesday, October 14, 2014

Screen Shot 2014-10-13 at 8.06.50 PM Screen Shot 2014-10-13 at 8.22.13 PMA look at a couple of momentum stocks – Netflix (NFLX) and GoPro (GPRO). Both just established TD Buy Setups and both are still trading above their respective TDST Support levels. From a relative basis, the damage to these stocks have been minimal. But if they sell under their TDST levels in the next couple days, this will signal further selling as the TD Buy Setup counts are still in play. A reverse price flip prior to TD Buy Setup ‘9’ will cast doubt on the selling momentum.


S&P 500 (SPX) SHORT TERM OUTLOOK: BEARISH

Swing to neutral is SPX closes above 1906.55 on Tuesday’s close.

Screen Shot 2014-10-13 at 2.23.09 PMScreen Shot 2014-10-13 at 2.26.53 PMThe short term structure is now aligned for a bounce. While the 2 hour SPX recorded a ‘perfected ‘9’ TD Buy Setup today, continuous selling on Tuesday can record the final ’13’ for TD Combo Buy at the close. Mesh this with the 4 hour SPX, which can ‘perfect’ a ‘8’ count TD Buy Setup, also at the close. If this outcome becomes true, an oversold bounce can commence on Wednesday.


S&P 500 (SPX) SHORT/INTERMEDIATE TERM OUTLOOK: BEARISH

Neutral if SPX closes above 1928.21, Wednesday’s bullish price flip. 

Screen Shot 2014-10-13 at 2.40.30 PMScreen Shot 2014-10-13 at 2.45.07 PMScreen Shot 2014-10-13 at 6.38.34 PMScreen Shot 2014-10-13 at 6.48.13 PMA view of al the major indices, there is nothing in the TD counts that suggest a more meaningful bounce is coming. While the short term is suggesting a possible rally on Wednesday, selling that rally remains the theme.


S&P 500 (SPX) INTERMEDIATE/LONG TERM OUTLOOK: BEARISH

Unless SPX can close above 2010.40, staying bearish.


S&P 500 (SPX) LONG TERM OUTLOOK: BULLISH

Neutral if SPX closes below 1960.23 on October 31, 2014. 


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Monday, October 13, 2014

Screen Shot 2014-10-12 at 9.10.34 PMThe S&P 500 (SPX) construct may be serving its purpose. It is built on multiple timeframe confluence and the daily SPX are spilling over to the weekly and monthly timeframes as a result. A combination of an overstretched optimistic market, and various global growth downgrades indicates the beginning of an adjustment period – prices setting up a long term trading range, which can take months to unfold. Until the adjustment period plays out, there should be opportunities both long and short going forward.


S&P 500 (SPX) SHORT TERM OUTLOOK: BEARISH

Back to neutral if SPX breaches 1955.93 intraday or closes above 1928.41. 

Screen Shot 2014-10-12 at 6.02.56 PMScreen Shot 2014-10-12 at 6.03.48 PMDue to volatility, two timeframes are displayed. The 2 hour SPX is suggesting another bounce is due as the first ’13’ has been recorded through TD Sell Countdown. Additional losses on Monday should produce a ‘9’ for TD Buy Setup and possibly ’13’ for TD Combo Buy. Looking at the 4 hour SPX chart, the volatility whipsaws are so great that TD Buy Setups have not been recorded despite a clear downtrend. However, the TDST level at 1916.41 has been breached suggesting that even if there is a bounce, the lows will at be retested once it has been established.


S&P 500 (SPX) SHORT/INTERMEDIATE TERM OUTLOOK: BEARISH

Change to neutral if SPX closes above 1935.10.

Screen Shot 2014-10-12 at 8.20.24 PMFor the first time in a long while, the daily SPX is in TD Buy Countdown mode. Couple that with the SPX trading underneath the daily TDST level at 1928.29, further downside is probable.


S&P 500 (SPX) INTERMEDIATE/LONG TERM OUTLOOK: BEARISH

Unless SPX can close above 2010.40, staying bearish.

Screen Shot 2014-10-12 at 5.12.12 PMScreen Shot 2014-10-12 at 5.18.58 PM Screen Shot 2014-10-12 at 5.23.32 PM Screen Shot 2014-10-12 at 5.26.30 PMIdea here is to follow the map. Since the Russell 2000 (RUT) is leading in counts, we should expect it to lead to the upside once the downside price exhaustion counts are realized.


S&P 500 (SPX) LONG TERM OUTLOOK: BULLISH

Neutral if SPX closes below 1960.23 on October 31, 2014. 


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Monday, October 6, 2014

After an almost 5% drop off the highs for the SPX, equity markets should remain wobbly until overbought excesses are gone through price or time.


S&P 500 (SPX) SHORT TERM OUTLOOK: BULLISH

Switch to neutral if 2 hour SPX if the current TD Buy Setup terminates prior to recording a “9″ and switch to bearish if 4 hour SPX closes below 1946.00.

Screen Shot 2014-10-05 at 3.49.57 PMScreen Shot 2014-10-05 at 3.53.29 PMDespite a 4.61% drop off the highs of the SPX, the 4 hour SPX chart was void of a TD Buy Setup, which can make it difficult to navigate a possible reversal. As suggested from the previous post, shorter timeframes can help adjust for volatility and in this case, the 2 hour chart has labeled TD counts. While the 4 hour SPX chart remained silent, the 2 hour recorded a cluster of 13’s and a TD Buy Setup “9”. This 2 hour SPX timeframe would have been useful as the primary timeframe for the short term when the monthly jobs number was reported. Since volatility expectations are still high, both the 2 hour and 4 hour chart will be continually used side by side.


S&P 500 (SPX) SHORT/INTERMEDIATE TERM OUTLOOK: BEARISH

Change to neutral if SPX closes above 1972.29.

Screen Shot 2014-10-05 at 9.46.21 PMOn the daily SPX, a textbook bullish scenario is unfolding with the SPX completing a TD Buy Setup @9 just above the TDST Support at 1928.29. Although expectations are tempered for a significant bull run, if the SPX is able to price flip bullish today, then we’ll go with it.


S&P 500 (SPX) INTERMEDIATE/LONG TERM OUTLOOK: NEUTRAL

Bearish if SPX is unable to close above 1985.54.

Screen Shot 2014-10-05 at 9.13.00 PMThe weekly SPX still has an active TD Buy Setup but with the daily SPX showing selling price exhaustion, it is still unknown if it can continue or exhibit indecision with alternating price flips.


S&P 500 (SPX) LONG TERM OUTLOOK: BULLISH

Neutral if SPX closes below 1960.23 on October 31, 2014. 

Screen Shot 2014-10-05 at 2.37.26 PM Screen Shot 2014-10-05 at 2.50.56 PM Screen Shot 2014-10-05 at 2.56.46 PM Screen Shot 2014-10-05 at 2.58.28 PMNote that some adjustments to the counts has been made as the month of July was omitted in previous posts. The revised SPX charts show a TD Sell Countdown “13” recorded last August. This has placed both TD Sell Countdown and TD Combo Sell with their final “13” counts as shown by the blue down arrows. What is missing is confirmation by registering a bearish price flip. That can come this month with a close below 1960.23. This will provide the initial framework of prolonged selling or bull/bear indecision. The Dow and the Nasdaq can record reverse price flips with an October close below 16826.60 and 4408.18, respectively. The RUT is leading all indices lower with an active TD Buy Setup.  All of the charts are as of the end of September.


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