From the 60 minute S&P 500 (SPX) chart above, there were quick selloffs testing support levels on April 19th, 22nd, and May 4th. Just when it looked liked a clear bullish path from May 6th, an intraday bearish reversal occurred on May 10th. The selloff continued and capitulated on a hot CPI inflation print last Wednesday, May 10th. On the same day, the SPX was testing the next level support at 4071.19, which is the 4 hour TDST Support level. That alone would make it suspect it can hold. However, there was support from the related Nasdaq and Russell 2000 indices recording daily TD Buy Setups @9’s. This help align a bounce was coming which did come, and it was good enough to keep the bear structure away for at least a little while.
While a bullish trend can still materialize, it’s more likely the continued sector bifurcation will keep markets range bound. This will be consistent with the intermediate/long term charts. Back to the 60 minute chart, there is still room early next Monday to move a bit higher as the 60/120 minute timeframes reach TD Sell Setup 9 counts. From there, we’ll get a better look if the strong selling pressure still exists. As long as the SPX holds the bright blue zone which was the former cluster of TDST Resistance levels between 4151.80 – 4145.52, markets have a chance for new highs. Below that, then the call for range bound trading remains intact. Trade below the notated 4111.53 (15 minute and potentially the 60 minute TDST Support), things will get dicey once more.
To support a reversal on Monday, the daily SPX chart is approaching a TD Sell Countdown 13 count. For this to be established on Monday, the SPX will need to print 4187.62 or higher. This is one of the DeMark rules in validating a true TD Sell Countdown @13. Once recorded, look for signs of market distress as the SPX starts to test levels as outlined in the 60 minute chart. Another tell tale sign of market distress is if the VIX begins to rise as the SPX goes higher. The current market conditions are a true ‘Wall of Worry’.
To illustrate more of last Thursday’s bounce, both the Nasdaq 100 ETF (QQQ) and the Russell 2000 ETF (IWM) recorded TD Buy Setup @9 last Wednesday. Going forward, if there is one concern, it’s the QQQ. Bearish viewpoint for all equities will come if QQQ trades below its TDST Support level at 311.54. By trading below 311.54, this will indicate the Nasdaq may have peaked and eventually drag down the SPX as well.
All the intermediate/long term timeframes continue to stay in price exhaustion levels. Note the above SPX weekly TDST Support was moved higher accordingly to 3819.25.
Bitcoin (BTC) is neatly packed between the 47,077 TDST Support and 62,572.48 TDST Resistance. The coiling action is productive for another move higher. A break below 47,077 for BTC can spill over to the stock markets as well.