The SPDR S&P 500 (SPY) has officially finished a proper TD Sequential 9-13-9 today. It’s not alone as the Dow Transports (DJT) also finished a 9-13-9 a couple days earlier. The impulsive down candle by the DJT provides some faith for the SPY for more downside. Another chart that is not shown is the iShares DJ Real Estate (IYR) ETF. That chart is also finished a TD Sequential 9-13-9 and sports a similar look to the DJT.
If we are in the midst of a rotation from bonds into equities, it may take a breather here. The CBOE 10 year T-Note (TNX) completed a TD Setup right at the psychological 2% level on the same day the FOMC says it isn’t close to stopping their monthly bond purchases. Since bond yields have been correlating with the equity markets, a stall in the TNX could result in risk off for the equity markets.
The S&P 500 (SPX) closed lower by a measly 0.40% but it’s holding promise that this is just the start. The next few days will tell us if there is more to this impulsive wave or if we finally kick it into a corrective wave. ( updated after market close )