US Dollar on a serious run and on a major breakout. While it could be a sign that US monetary policy is beginning to normalize, it also creates some near term disruptions to accommodate asset allocation changes. The daily DeMark US Dollar index (DXY) is recording a pair of “13’s” and though this signals price exhaustion for that timeframe, longer term strength looks to continue as the weekly DXY is on a TD Sell Countdown @3, along with an uninterrupted TD Sell Setup @9 + 2. The monthly DXY tells a clearer picture with the Keltner/Bollinger (TTM_Squeeze) volatility indicator showing positive momentum. The thought is to allow the monthly TD Sell Setup attempt to record a “9” count and take it from there.
Equity markets are showing some volatility, usually associated with a selloff in stocks. A weak seasonal pattern is here and taking hold.
S&P 500 (SPX) SHORT TERM OUTLOOK: BEARISH
Switch to neutral if 4 hour SPX closes above 1998.39 today.
Although the recent selloff was swift and created some technical damage, the TD Sequential counts are missing due to price volatility. Under normal circumstances, a bullish price flip for the 4 hour SPX can occur today by closing above 1966.56. However, that is not indicative of a trend reversal for the short term. Therefore, utilizing shorter duration timeframes can help. In this case for today, the designated bullish marker is the 30 and 60 minute TDST Resistance level at 1998.39 and 1995.41, respectively.
S&P 500 (SPX) SHORT/INTERMEDIATE TERM OUTLOOK: BEARISH
Same as short term, neutral if SPX closes above 1998.39.
Both SPX TD Sell Countdown and TD Combo Sell are still active. Those counts will disappear if the current TD Buy Setup records a “9”. If a full TD Buy Setup is not able to record a “9”, then the possibility of a run towards the TD Trend Factor at 2027.81 still exists.
S&P 500 (SPX) INTERMEDIATE/LONG TERM OUTLOOK: NEUTRAL
Bearish if SPX closes below 1960.23, the monthly SPX price flip for October.
Most major indices have price flipped bearish. The lone exception is the Dow, which needs to close below 17,137.36 this week to price flip bearish. For the SPX, it would be fairly easy for the current TD Buy Setup to record a “2” count, but it wouldn’t be necessarily bearish. However, a close below 1960.23, the price flip level for the SPX in October, will show the bearish tendency is on track.