Monday, January 14, 2019

There are indications the S&P 500 (SPX) is starting to normalize. Currently, the SPX is still looking for a resistance point before it begins to consolidate or even retest the lows. This is the week where the SPX should begin to experience some type of selloff. With short term timeframes at price exhaustion, the rally retracement should begin anytime this week. The sweet spot is this Wednesday, January 16, 2019, where the daily SPX can record a TD Sell Setup @9. To gauge how deep a selloff may incur, utilizing various TDST Support in different timeframes in relation to their respective TD Setups is the key. There are clusters of TDST Support from the 10 – 60 minute timeframes between 2547.56 to 2564.20. That’s about a 2% move down which can be accomplished in 1-2 trading days. Any gap open below 2564.20 and stays below that level will likely see the 4 hour TDST Support tested at 2447.63. Below that level, recession discussions can be brought up again.

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

The four – hour TD Sell Setup has recorded a 9 count, making a turn from bullish to bearish imminent.

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

Neutral until further notice

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

Neutral if the SPX cannot close below 2416.62 this week. 

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

Neutral if SPX closes above 2913.98 at the close of Thursday, January 31, 2019

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Monday, January 7, 2019

There is little dispute that the US economy is starting to regress. If the regression is contained to a slowdown, then the 20% selloff in the S&P 500 (SPX) from the high of 2650.54 to the low of 2346.58 has already priced that in. What the market has not priced in is a recession. The threat of a recession will be made official if the S&P 500 (SPX) falls below the low at 2346.58. Above 2650.54, the SPX has signaled the first step that the worst is over.  In the meantime, stocks need to negotiate the range between 2346.58 and 2650.54, the unqualified TDST Support. In the days or weeks ahead, managing how various TD Setups come together will help determine the bullish or bearish path.

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

With last Friday’s close the TD Buy Setup has been ‘perfected’. If the SPX should close below the 23.6% Fibonacci retracement at 2492.88,  there is strong consideration to switch to neutral. 

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

Neutral until further notice

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

Neutral if SPX closes above 2599.95 on Friday, January 11, 2019

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

Neutral if SPX closes above 2913.98 at the close of Thursday, January 31, 2019

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Wednesday, January 2, 2019

On the current S&P 500 SPDR ETF (SPY) daily chart above, the TD Buy Setup @9 is missing.  The rally last Wednesday, December 26, 2018, tallied at about 5%. That was then labeled TD Buy Setup @8. The following trading day on Thursday, December 27, 2018, another late hour rally fully erased what otherwise would have been a TD Buy Setup @9. Aside from the illiquid holiday week, the conditions for a qualified TD Buy Setup @9 were all there. Therefore, an unofficial non qualified 265.37 TDST Resistance level has been diagrammed above. The S&P 500 (SPX) equivalent is 2650.54. Although it’s not an official TDST Resistance, it still is meaningful.

Entering 2019, the S&P 500 (SPX) has set a floor at 2346.58 and a ceiling at 2940.91. Market volatility should continue to reign as long as the SPX is contained between 2650.54 (non-qualified TDST Resistance), and the recent low at 2346.58. If the current rally is just a counter rally, the SPX has about two weeks to prove bearish momentum is still intact as judged by the weekly SPX’s TD Buy Setup. On the flip side, if the low last week marked an important bottom, the SPX would need to take out the non-qualified SPX TDST Resistance at 2650.54.  Short term timeframes should still be utilized through the volatility noise,

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

Neutral (bearish if aggressive) if the SPX closes below 2485.14 at the close of Wednesday, January 2, 2019. 

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

Neutral if SPX closes below 2467.70 at the close of Wednesday, January 2, 2019

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

Neutral if SPX closes above 2633.08 at the close of Friday, January 4, 2019

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

Neutral if SPX closes above 2913.98 at the close of Thursday, January 31, 2019

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Monday, December 24, 2018

Despite the freefall selloff, the volatility index (VIX) is relatively tame. Does that mean equities will have to collapse before buyers will step in? Whatever happens, the longer timeframes from the major indices are now coming into price exhaustion. The daily S&P 500 (SPX) is currently at TD Buy Setup @ 6. The neighboring Four Hour SPX has recorded both a TD Buy Setup @ 9, TD Buy Combo @ 13, and it’s close to recording a TD Buy Countdown @13. If everything goes as planned, the date of reversal is Wednesday, December 26 or Thursday, December 27. Unless indices break key TDST Resistance levels, it probably won’t be the absolute bottom as technical damage has been pretty severe.

Another form of support can come from emerging markets. Portfolio Managers see value in this region, and per the monthly iShares Emerging Market ETF (EEM), EM stocks are also primed to at least show a counter trend reversal. To ‘perfect’ the active TD Buy Setup @9, a lower low at 37.58 or lower. Projecting out a few months out, if the rally eventually fails, and drops to a lower low below the 37.26 TDST Support, that’s fair warning markets are tilting towards the apocalyptic.

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

Bullish if SPX closes above 2471 at the close of Monday, December 24, 2018

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

Neutral if SPX closes above 2471 at the close of Monday, December 24, 2018

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

Neutral if SPX closes above 2599.95 at the close of Friday, December 28, 2018

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S&P 500 LONG TERM OUTLOOK: BEARISH

Neutral if SPX closes above 2901.52 at the close of Monday, December 31, 2018

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Thursday, December 20, 2018

QUICK UPDATE:  Equities are on track for selling exhaustion next week via the DeMark TD Buy Setup. Looking at the S&P 500 e-mini futures (ES), it is sitting right at the 2nd degree TD Trend Factor at 2509.81. There is a good possibility the futures or equites will box trade in a volatile range and eventually resolve lower into a TD Buy Setup @8 or @9. Trading short term timeframes, the 10 minute and the 15 minute S&P 500 (SPX) need a trade at 2488.96 or lower and their counts will be ‘perfected’, and the SPX can attempt to rally. If the SPX trades above the 10 and 15 minute TDST Resistance at 2585.29, being bearish comes into doubt.

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Wednesday, December 19, 2018

QUICK UPDATE: The S&P 500 (SPX) is bearish, and has the potential to free fall. Every attempt the SPX tried to rally, it could never take out the short term (5 min – 30 min) TDST Resistance levels. Wednesday is Fed Day and that will come with lots of intraday volatility. If the SPX continues to sell off, note the 4 hour SPX can record an 8 count at the end of the day, and possibly a 9 count the following day. The daily Russell 2000 ETF (IWM) recorded a TD Buy Setup @9 last Monday, and it is within the TD Risk Level at 131.44, which is about 4% away from Tuesday’s close. All this provides a suggestion the selling can halt during Wednesday’s trading. If equities react positively tomorrow, the SPX will be considered neutralized starting at 2650.16 – 2670.19, where the 2 hour and 4 hour TDST Resistance resides. Aside from that scenario, the current TD Buy Setup of the daily SPX has strong potential to record a TD Buy Setup @9.

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Monday, December 17, 2018

The daily chart of the SPDR S&P 500 ETF (SPY) shows the first close below the 263.12 TDST Support. Recording a TD Buy Setup @1 and breaking major support on the same day should be convincingly bearish. However, there are some indications that the SPY could be closer to price exhaustion than a renewed selloff that can last for 1-2 weeks. Note that the Friday selloff was relatively mild with a drop of 1.85%, and did not make a lower low.

Furthermore, the Russell 2000 ETF (IWM) is at TD Buy Setup @8, which meets the minimum count for price exhaustion. Sector ETF’s such as the XLF financials and XRT retail are also on TD Buy Setup @8. These mismatches by the major indices and sector ETF’s requires attention that equities may not automatically collapse. If the SPY is truly bearish, it should make a lower low on Monday. The small cap Russell 2000 should also make a lower low, and close near the lower range of the day, and underperform the SPY. If these conditions are met, then the SPY is still bearish. If the SPY should close back above the former 263.12 TDST Support (SPX equivalent 2635.34), that’s a good indication bullish forces are active. In all likelihood, Monday and Tuesday will be dominated by volatile trading noise until the Fed meets on Wednesday, December 19, 2018. It will be decided then if the SPY goes on to record a TD Buy Setup @9 and the IWM goes into TD Buy Countdown, or equities marked an intermediate bottom and goes into the seasonal Santa Rally.

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

Bullish if SPX closes above 2635.34 at the close of Monday, December 17, 2018

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

Neutral if SPX closes above 2635.34 at the close of Monday, December 17, 2018

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

Neutral if SPX closes above 2632.56 at the close of Friday, December 21, 2018

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

Neutral if SPX closes above 2901.52 at the close of Monday, December 31, 2018

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