Monday, March 2, 2015

A major shift is occurring in the currency market. With global central banks loosening monetary policy, their currencies are being weakened as a result and the US Dollar has turned higher. This trend will likely continue as global players are pressured to buy dollars. The technical picture also supports the fundamentals. Now that the US Dollar basket index (DXY) monthly chart has decisively broken out, the conclusion of February ended with a 9 count TD Sell Setup. Given the long sideways trading action (note the TTM_Squeeze), there is high probability TD Sell Countdown will ensue.

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S&P 500 (SPX) SHORT TERM OUTLOOK: NEUTRAL

Back to bullish if 4 hour SPX closes above 2110.77 today.

With the short term SPX exhibiting a minor selloff, eventually, there is likely to be more upside to fulfill the TD Sell Countdown and TD Combo Sell counts.

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S&P 500 (SPX) SHORT/INTERMEDIATE TERM OUTLOOK: NEUTRAL

Switch back to neutral if daily SPX closes above 2124.35, the TD Trend Factor.

The daily SPX completed a 9 count TD Sell Setup and the high came within’ 5 points from reaching the 2124.35 TD Trend Factor. The trend is still bullish, and any selloff will likely be contained. However, complacency can be harmful, which is why the current outlook is neutral, based off the bearish price flip of the most recent data point.

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S&P 500 (SPX) INTERMEDIATE/LONG TERM OUTLOOK: NEUTRAL

Flip to bearish if SPX closes below 2055.47 or flip to bullish if SPX closes above 2110.30 on March 6, 2015. 

The weekly SPX is still on track for a TD Sequential 9-13-9 count. Although technically it violates the rules since the bullish price flip occurred before the 13 count of the finished TD Sell Countdown, the positive factors currently outweigh the negative.

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S&P 500 (SPX) LONG TERM OUTLOOK: BULLISH

Flip to neutral if monthly SPX closes below 2067.56 by March 31, 2015. 

Despite coming close to flipping neutral the last two months, the monthly SPX keeps the seemingly infinite TD Sell counts going.

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Monday, February 23, 2015

The power of the Keltner/Bollinger relationship as represented by the TTM_Squeeze indicator has been emphasized many times over. The most recent was oil and another one is setting up on the gold chart. Utilizing the GLD ETF as a proxy for gold, the horizontal dots on the TTM_Squeeze are currently red, stating gold is now coiling for a volatility move. At this point, the stage is set for a major bullish run, as both the daily and monthly charts are holding above their respective TDST Support levels. If that projection is incorrect, GLD should first selloff below 114.08 on the daily chart, and if 108.95 is violated on the monthly, that will be the first major confirmation, gold is about to take a major leg lower. Bear in mind, this scenario could months to play out.

On the equity markets, specifically the S&P 500 (SPX), the spotlight is now on the daily chart as it approaches a completed TD Sell Setup @9 today.  The weekly now has a bullish and bearish option.

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S&P 500 (SPX) SHORT TERM OUTLOOK: BULLISH

Switch to neutral if SPX closes below 2097.50.

The 4 hour SPX is in TD Sell Countdown mode. Look at the daily SPX chart for better clues of what is ahead.

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S&P 500 (SPX) SHORT/INTERMEDIATE TERM OUTLOOK: BULLISH

Change to neutral if SPX closes below 2097.50, same as Short Term Outlook.

Now with the TD Sell Setup closing in on a 9 count, just under the TD Trend Factor at 2124.35, a selloff of some magnitude is expected. Not much is expected as the sideways trading action since early December may not have played out in it’s entirety.

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S&P 500 (SPX) INTERMEDIATE/LONG TERM OUTLOOK: NEUTRAL

Flip to bearish if SPX closes below 1994.99 or flip to bullish if SPX closes above 2110.30 on February 27, 2015. 

A renewed bullish outlook is set. By simply following the TD Sell Setup, the motion is set for continued upward momentum. But utilizing some timeframe continuity, the bearish outlook has not gone away, as the weekly SPX is dependent on the daily SPX chart. The daily SPX is excepted to reach upside price exhaustion via the TD Sell Setup @9. If the daily selloff is significant enough to erase the gains of last week’s weekly SPX close of 2096.99, the bearish option gains a notch.

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S&P 500 (SPX) LONG TERM OUTLOOK: BULLISH

Change to neutral if SPX cannot close above 2018.05 by February 27, 2015. 

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Wednesday, February 18, 2015

Quick update: Despite the noise in Greece and the Ukraine, the odds are favoring higher prices for the S&P 500 (SPX)

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S&P 500 (SPX) SHORT TERM OUTLOOK: BULLISH

Switch to neutral if SPX closes below 2096.76.

With a recorded TD Sell Setup @9 on the 4 hour SPX chart, a new TDST Support reference point is notated at 2057.99.

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Tuesday, February 17, 2015

The S&P 500 (SPX) negative headwinds for the short to short/intermediate term are over and the current bullish leg should have staying power.

S&P 500 (SPX) SHORT TERM OUTLOOK: BULLISH

Neutral if SPX closes below 2088.17 at session close.

The 4 hour SPX chart will likely show a completed TD Sell Setup today. But since the breakout came with upwards momentum as shown by the TTM_Squeeze indicator on the SPX daily chart, it is probable that any dip will present a buying opportunity, and the completed TD Sell Setup should transition to a TD Sell Countdown.

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S&P 500 (SPX) SHORT/INTERMEDIATE TERM OUTLOOK: BULLISH

Flip to neutral if SPX closes below 2068.59.

The TD Trend Factor at 2124.35 is within striking distance but it may not matter as the TTM_Squeeze has pressed to the upside. Also take in account the last pair of 13’s (blue down arrows) has produced a lengthy sideways trading pattern, and each selloff almost produced a 5.5% high to low drop. (A 5.5% selloff technically renders the TD Trend Factor useless.) Given these variables, expectations are for the daily TD Sell Setup to complete a TD Sell Setup @9.

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S&P 500 (SPX) INTERMEDIATE/LONG TERM OUTLOOK: NEUTRAL

Switch to neutral if SPX closes below 2051.82 on February 20, 2015. 

Depending on the close this week, a bullish option may come back to the picture.

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S&P 500 (SPX) LONG TERM OUTLOOK: BULLISH

Change to neutral if SPX cannot close above 2018.05 by February 27, 2015. 

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Monday, February 2, 2015

Measuring the performance of certain days or months of the year has some predictive power for the remainder of the year. Probably the most recognized measuring indicator is the January Barometer by Yale Hirsch. Another mention should go to Wayne Whaley’s three best months. Utilizing dates from November 19 through January 19, this provides an alternative to the January Barometer. When the three best month’s performance is greater than 3%, the remainder of the year is overwhelmingly positive. When the performance is between 0-3%, the results are mixed but favors the positive side. When the performance is negative, the remainder of the year is negative 70% of the time. For the current year, the S&P 500 performance from November 19, 2014 – January 19, 2015, is -1.57% – equating to a cautious environment.

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S&P 500 (SPX) SHORT TERM OUTLOOK: BEARISH

Flip to neutral if SPX closes above 2001.34 in the first half of the session. 

Beware of the bear trap. The SPX has recorded an ‘unperfected’ TD Buy Setup just above the 1988.12 TDST Support level. There is a bullish and bearish option here. The bullish is when the TD Buy Setup ‘perfects’ the count with an intraday low of 1989.18 or lower and closes above the 1988.12 TDST Support level. This could potentially define another rally attempt. The bearish option is simply trading and closing under the 1988.12 TDST Support level.

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S&P 500 (SPX) SHORT/INTERMEDIATE TERM OUTLOOK: BEARISH

Switch back to neutral if SPX closes above 2029.55.

The TTM_Squeeze indicator (based off the relationship between the Bollinger and Keltner bands) is officially showing a trading range, as the horizontal dots changed from green to red. This is the coiling effect which sets up another leg of the bear trend or a fresh bullish trend. This time, a bullish trend can have staying power and challenge the 2124.35 TD Trend Factor.

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S&P 500 (SPX) INTERMEDIATE/LONG TERM OUTLOOK: BEARISH

Back to neutral if SPX closes above 2044.81 on February 6, 2015. 

The TD Buy Setup is still in effect. Since the daily is in a potential volatility squeeze, the daily SPX chart is emphasized for early warning clues.

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S&P 500 (SPX) LONG TERM OUTLOOK: BULLISH

Change to neutral if SPX cannot close above 2018.05 by February 27, 2015. 

Using TD Sell Setup, the monthly SPX is ever closer to finally ending the solid bullish run that started at the end of August of 2012! Note the Nasdaq has finalized a TD Sell Setup this month clustered near the 13’s, denoted by the blue arrows. For the Nasdaq, some indecision would be expected considering it is trading near the all time closing high double top.

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Monday, January 26, 2015

Not much is changed. The market is still whipsawing and there is no definitive trend as defined by TD Sequential.

S&P 500 (SPX) SHORT TERM OUTLOOK: NEUTRAL

Change to bearish if SPX closes below 2044.65 in the first half of the session or below 2063.38 at end of the day. 

The short term uptrend is put to the test since the current TD Sell Setup has been perfected with bar 8 marking the true high in the series.

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S&P 500 (SPX) SHORT/INTERMEDIATE TERM OUTLOOK: NEUTRAL

Switch the bearish if SPX closes below 2022.55

Alternatively, to minimize the whipsaws, the SPX four hour TDST Support at 1988.12 can be used as the bull/bear level.

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S&P 500 (SPX) INTERMEDIATE/LONG TERM OUTLOOK: BEARISH

Going back to neutral if SPX closes above 2058.20 on January 30, 2015. 

The weekly does not need to sell off hard to keep the TD Buy Setup intact. Another rally will also place the weekly in a alternating price flip environment.

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S&P 500 (SPX) LONG TERM OUTLOOK: BULLISH

Neutral if SPX closes below 1972.29 on January 31, 2015.

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Thursday, January 22, 2015

QUICK UPDATE: Tomorrow’s ECB QE announcement has been well telegraphed, and the number is expected to be around 50 billion euros a month. While this would typically shoot the euro lower, this time around would support a “buy the news” event, as the euro has become crowded enough to create a short squeeze opportunity. The TD counts also support this notion. The weekly EUR/USD (shown) has been recording 13’s and last week’s bar notched a TD Buy Countdown @13. For timeframe comparison, the monthly EUR/USD is on a ‘perfected’ TD Buy Setup @8 and it recorded a TD Buy Countdown @13 last month. For the SPX index, both the short term and the short/intermediate term are now neutral.

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