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)
Hope you don’t mind me asking but I’m currently trying to code the Demark Sequential indicators for my platform and I seem to have contradictory documentation on a setup ‘qualifier’, ‘Intersection’ or ‘perfection’ (all three of which I understand to refer to the same condition).
In my 3 reference materials (I’ve used the Buy Setup descriptions for each of the following):
1. Demark Indicators by J Pearlman, ‘perfection’ is described as: ‘The low of bars eight or nine of the TD Buy Setup or a subsequent low must be less than, or equal to, the lows of bars six and seven of the TD Buy Setup’.
2. In ‘Demark on day trading options’, a ‘setup qualifier’ is described as: ‘In order to record a completed buy Setup, the Setup qualifier requires that the low of the seventh, eighth, or ninth price bar of a buy Setup be below the low of the sixth price bar. If the low of the 6 price ar is not exceeded to the downside by the low of the 7, 8, or 9 price bar of the buy Setup, then it will typically be broken within three days after the ninth price bar is recorded and the Setup is completed’.
3. Bloomberg manual for Demark indicators states ‘Intersection occurs for a Buy Setup once the high of bar eight (8) or of bar nine (9) or the first subsequent bar to any standard nine (9) bar Setup is greater than or equal to the low of any bar three or more bars earlier up to and including the first bar of the Setup.’
To my reading, each of the three definitions are distinctly different. I fully intend to backtest all three of these definitions to see how they affect trend detection but since you’re the only person I know who has a clue about Demark indicators I thought I’d ask you for your thoughts.
These all sound like different TD Setup filters. The basic TD Setup is the one through nine bar series. How you want to filter them for a qualified TD Setup is more personal. You choose.
In DeMark’s ‘New Market Timing’, he wrote that TD Sequential had three parts: Setup, Countdown, and Intersection. The definition of intersection is in the Bloomberg manual that you mentioned. Intersection was included to qualify if TD Setup will transition to TD Countdown.
In Jason Perl’s book, there was no discussion of ‘Intersection’ and defined TD Sequential only had two parts – Setup and Countdown. He mentions that TD Setup should be ‘perfected’ which sounds like his version of ‘Intersection’ which is the consensus version. I haven’t read DeMark’s option book but your description sounds like more of a conservative version of Perl’s.
All this DeMark stuff is open to experimentation so you have a lot of options to deal with. You may have noticed I sometimes take an eight count as a final count if external conditions warrant it. That’s just my preference.
Hope that helps and good luck on the coding. Big task.