The S&P 500 (SPX) will record its next price exhaustion point if it trades at/above 1520.08 today. The potential TD Sell Countdown will come after the four hour SPX chart signaled price exhaustion on 2/19. Note the TD propulsion threshold level that was initially drawn up last Wednesday. It pierced higher 2 days in a row but cannot close above the 1516.36 level. While that can be open to interpretation, it will be in conflict with the potential finish of the TD Sell Countdown if there is a decisive close above that 1516.36 level. Also, sentiment and breadth readings are neutral.
On the weekly SPX chart, there is a triple cluster of exhaustion points. A TD Sell Setup will finalize if today’s close is at/above 1513.17. That close is necessary to qualify as an official TD Setup. However since the high of bar 8 of the setup is higher than bar 6 and 7, the series has already been met with “perfection”. So while it isn’t necessary to record a bar 9 count, having an official TD Setup will remove the ambiguity of what lies next.
The combination of the Bollinger Band and Keltner Band overlaid on the SPX is signaling future volatility. Some people use Bollinger Bands on its own and when the Bollinger Bands pitch closer and closer together, the bands eventually widens when there is a breakout in price and they sprint quickly. With the inclusion of Keltner Bands, it gives more of a direct read of when the “pinching” occurs and when the bands will begin to widen. Right now, the Bollinger top line has broken into the Keltner band. This is the start of the quiet period. It fits well with the current Elliott wave environment. It’s a two way market until it breaks.
All the various Elliott wave four patterns are still on the table for the markets. Too many mixed signals to claim an overall bearish stance. This is really a good market for intraday traders for those who can take advantage of the extreme ranges. (updated mid trading day)