Last Friday’s S&P 500 (SPX) rout was the result of the blowout jobs number, which suggests interest rate hikes may come sooner than later. This does present risks for volatility on a large scale (monthly SPX chart), but ultimately, interest rate adjustments are preferred than the continued expansion of the Fed’s balance sheet. Currently, the focus is on the 4 hour and daily SPX chart. The timeframes have TDST Support levels in close proximity of each other – 2057.99 and 2046.74. The most bullish scenario would be for the selloff on the 4 hour timeframe record a 9 count TD Buy Setup, just above 2057.99 TSDT Support Level. Continued selloff below the 4 hour TDST Support level will raise some questions about the continuity of the rally, as the 4 hour and daily SPX chart will have to reconcile the two TDST Support levels.
S&P 500 (SPX) SHORT TERM OUTLOOK: NEUTRAL
Back to bullish if 4 hour SPX closes above 2101.23 today.
As mentioned in the intro, the 4 hour SPX chart is the initial test of future direction. If the 4 hour SPX drops below the TDST Support level at 2057.99, that will be the first indication of further deterioration. Otherwise, another run to highs is expected.
S&P 500 (SPX) SHORT/INTERMEDIATE TERM OUTLOOK: NEUTRAL
Bearish if SPX closes below 2046.74. Otherwise staying neutral.
There are bull/bear battle lines notated at 2124.35 and the 2046.74 – 2057.99 range. In an effort to avoid whipsaws, any trading between this levels are neutral.
S&P 500 (SPX) INTERMEDIATE/LONG TERM OUTLOOK: NEUTRAL
Flip to bearish if SPX closes below 2046.74 or flip to bullish if SPX closes above 2124.35 on March 13, 2015.
With bullish and bearish factor now equally weighed, neutral is the best stance.
S&P 500 (SPX) LONG TERM OUTLOOK: BULLISH
Flip to neutral if monthly SPX closes below 2067.56 on March 31, 2015.