Monday, July 25, 2016

There will be another policy announcement when the FOMC meets again this week. The Fed is constantly on the verge of raising rates, but finds it difficult with sluggish global growth and uncertainty. With the US elections looming, market expectations for a rate hike will likely not occur this week. However, on the CBOE 10 year Treasury Index (TNX), the weekly chart will show clear price exhaustion with one more spike lower, increasing the chance that 10 year treasuries will finally find a significant low. Both TD Buy Countdown and TD Combo Buy are closing in on their respective 13’s. The monthly TNX is also nearing a 9 on TD Buy Setup, which provides support for the weekly. Note on the monthly TNX that the 16.14 TDST Support has been broken. This does not have much significance since the monthky bar that closed under the 16.14 TDST Support was a TD Buy Setup @6. It would have more significance if it was TD Buy Setup @1, @2, or @3. Screen Shot 2016-07-24 at 5.07.12 PMScreen Shot 2016-07-24 at 5.18.01 PMFor stocks, US equity outflows and negative sentiment are in abundance. That alone should keep prices afloat for awhile longer.


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

Neutral if SPX closes below 2173.78.

Screen Shot 2016-07-22 at 9.16.33 PMWhen there is a recorded TD Sell Setup @9, the typical response is a pause, or pullback. With the recent recorded 9, that pullback scenario is still viable, but it is also challenged with an unbroken TD Sell Setup @11. Until there is a bearish price flip, the signal is bullish.


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

Neutral if weekly SPX closes below 2059.74, the monthly bearish price flip, on Friday, July 29, 2016.

Screen Shot 2016-07-24 at 5.55.18 PMIf the rally continues unabated, the trifecta of TD Sell Setup @3, TD Sell Countdown @8 and TD Combo Sell @10 will produce a the sweet spot for a more significant pullback in 3-6 weeks.


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

Bearish if monthly SPX closes below 2059.74 on Friday, July 29, 2016.


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Monday, July 18, 2016

QUICK UPDATE: On the daily S&P 500 (SPX), the TD Sell Setup can record an 8 or 9 count on Tuesday or Wednesday. This is the area where the SPX can stall. However, given the strong breadth, an uninterrupted TD Sell Setup past the 9 count has a better than average chance of occurring. The TD Sell Setup for the weekly SPX is still in the early stages, indicating more gains to come. Screen Shot 2016-07-15 at 7.31.28 PMScreen Shot 2016-07-15 at 7.26.35 PM

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Wednesday, July 13, 2016

QUICK UPDATE: A lot can happen in a month. Brexit came, but a full fledged selloff never materialized, and now, the S&P 500 (SPX) is poised for another tremendous long term rally – like it or not. If this rally reverses course, the TD indicators will help with the exit.

Screen Shot 2016-07-12 at 8.10.29 PMWith the weekly SPX chart, it is clear the 2104.27 TDST Resistance has been breached to the upside, and provides more confidence that the active YD Sell Setup and TD Sell Countdown will complete.

Screen Shot 2016-07-12 at 8.09.23 PMFrom the daily chart, the SPX is best explained through a timeline. First the 1850.61 TDST Support defined the bearish price level, and later the 2112.02 TD Trend Factor defined the upside target. Note the TD Trend Factor was tested twice, but it is no longer active since the minimum 5.5% correction at 1993.76 was recorded. Considering the long term sideways correction lasted over a year, as indicated by the monthly SPX chart (not shown), the recent upside breakout above the 2104.27 TDST Resistance could last awhile.

 

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Monday, May 16, 2016

Screen Shot 2016-05-13 at 10.33.29 PMHere’s some analysis on the US Dollar via the US Dollar Index ($DXY). There has been a two week rally in part to relative weakness of other currencies and the slow pace of Fed interest rate policies. The rally came just as the weekly DXY recorded a 9 count TD Buy Setup. Overall, the DXY is expected to stay range bound, and this will be the conclusion if the weekly DXY can close above the 97.064 TDST Resistance. However, if the rally continues with a monthly close (May 31, 2016) above 99.531, that will signal a new upside trend is beginning. Outside those scenarios, a selloff below the recent low at 91.919 will reinforce TD Buy Countdown will take place, and the correction should gain momentum.

Note: This will be the last post as I will take a two month break. Knowing that a lot can happen between that time, I updated the Long Term Outlook.


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

Neutral if SPX closes above 2059.92 at the close. 

Screen Shot 2016-05-15 at 11.37.53 AMSPX is still selling off, but the real deal is at the 2010.04 TDST Support Level.


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

Neutral if SPX closes above 2084.39.

Screen Shot 2016-05-13 at 9.49.04 PMUsing traditional tools, the SPX closed below the 50 day moving average. This makes the 2112.02 TD Trend Factor more relevant as a top. To officially qualify the viability of the TD Trend Factor, the SPX needs to trade 5.556% lower off the 2111.05 high, placing a soft target at 1993.76.


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

Neutral if weekly SPX closes above 2091.58 on Friday, May 20, 2016

Screen Shot 2016-05-13 at 9.10.12 PMThe benefit of the doubt goes to the bears.


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

Bullish if monthly SPX closes above 2107.29 or Bearish if monthly SPX closes below 1940.24 on Tuesday, May 31, 2016

Screen Shot 2016-05-15 at 11.29.37 AMWith Fed policy indecision and an outrageous presidential race, the long term S&P 500 (SPX) is expected to stay bounded between 1850 and 2100. Trading outside those levels should accelerate gains or losses, as the monthly SPX TTM_Squeeze has been coiling for months.


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Monday, May 9, 2016

Screen Shot 2016-05-06 at 8.11.20 PM The state of the emerging markets, using the iShares Emerging Markets ETF (EEM), has helped provide a glimpse of the global outlook. On the weekly EEM, the recent ‘perfected’ TD Sell Setup @9 recorded underneath the 36.27 TDST Resistance level, which is the classic indication that places the EEM on alert for a price decline. On the flip side for the weeks ahead, if the EEM sells off, but not deep enough to close below 30.06, the TDST Support level, the presumption will be that another rally is redeveloping.

Screen Shot 2016-05-07 at 10.44.30 AM

Screen Shot 2016-05-08 at 9.12.35 AMFrom an anecdotal note, I often resort to a long time economist, Edward Yardeni’s weekly macro charts. (Here’s the public link: Yardeni.com/pub/peacockbullbear.pdf). There are gobs of sentiment charts, but the Bull/Bear Ratio Over 3.0 is really glaring. This chart speaks to the industry of how bullish asset managers have been the last few years, and historically it has never seen a cluster of red periods recently, going all the way back to 1987. With all the stories floating around about the market saturation of hedge funds, and their underperformance, the chart shows asset managers have been playing catch up at the wrong time. Then with the Bull/Bear Ratio Under 1.0, note the 2015 – 2016 excessive bearishness which resulted in the sharp rallies. The mass bullishness/bearishness of asset allocation is firmly in place. This helps confirms the neutral outlook on the long term S&P 500 (SPX).


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

Bearish if SPX closes below 2050.47 at the close. 

Screen Shot 2016-05-06 at 7.53.53 PMAlternating price flips is currently supporting the trading range. A selloff below the 2010.04 TDST Support level should accelerate a larger selloff.


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

Neutral if SPX closes above 2063.37.

Screen Shot 2016-05-06 at 7.40.50 PMThe current TD Buy Setup @7, correlated with the selloff has not been spectacular with just a 3.3% pullback. If TD Buy Setup records an ‘8’ on Monday and a ‘9’ on Tuesday, along with a low print equal or below 2039.45, then downside price exhaustion has been signaled, and the SPX will need to reset itself and decide on direction.


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

Bearish if weekly SPX closes below 2057.14 on Friday, May 13, 2016

Screen Shot 2016-05-06 at 5.58.39 PMThe weekly SPX hit another lower low and lower close, but not low enough to keep the TD Buy Setup continuity. Even though a close below 2080.73 is this week’s reverse price flip, another lower close below 2057.14 would be the stronger factor to switch the outlook back to bearish.


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

Bullish if monthly SPX closes above 2107.29 or Bearish if monthly SPX closes below 1940.24 on Tuesday, May 31, 2016


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Monday, May 2, 2016

Continuing on gold’s ascent from the Monday, March 21, 2016 post, GLD (SPDR Gold ETF) is appearing to recycle its TD counts on the daily chart. After a minor pullback which GLD never closed below the designated 115.86 TDST Support Level, it is now powering through new highs, and this should continue. Note that on the daily chart, 13’s were recorded, in particular TD Sell Countdown. Considering the TD Sell Countdown @13 were recorded inside of the range of the previous TD Sell Setup, this is a low probability 13 and it should be ignored. On the weekly chart, GLD moves to TD Sell Countdown, suggesting the uptrend is firmly in place – all due to the global central bank quagmire. Screen Shot 2016-04-30 at 8.40.25 PMScreen Shot 2016-04-30 at 8.06.10 PM

For the equity markets, the recent selloff has been on a minor scale. However, with the anticipation that volatility will increase, the near and intermediate term outlook is bearish. Big economic reports this week include European and China PMI’s and US job numbers.


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

Neutral if SPX closes above 2076.14 at the close. 

Screen Shot 2016-04-30 at 8.58.51 PMThe technical difficulties from last week has been addressed. An inadvertent TD Sell Setup was recorded which threw all levels off course. However, the problem was not large enough to change the outlook. Currently the TDST Support is at 2010.04. That’s the level which will determine bull/bear polarity.


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

Neutral if SPX closes above 2091.70.

Screen Shot 2016-04-30 at 9.08.11 PMFollow the price flips. Bullish flips are neutral and bearish flips are bearish.


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

Neutral if weekly SPX closes above 2047.60 on Friday, May 6, 2016

Screen Shot 2016-04-29 at 6.57.39 PMIt is possible the weekly SPX is simply going through a consolidation before powering higher. But since the price exhaustion ingredients are present, we’ll stay with the bearish signal that is given.


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

Bullish if monthly SPX closes above 2107.29 or Bearish if monthly SPX closes below 1940.24 on Tuesday, May 31, 2016

Screen Shot 2016-04-29 at 6.27.29 PMThe monthly SPX is still going through a set of alternating price flips. Until the key levels are breached, the outlook will remain neutral.


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Monday, April 25, 2016

Continuing on both the Nasdaq (COMP) and the Russell 2000 (RUT) weekly charts from last week, the Nasdaq count has been fulfilled in terms of a ‘perfected’ count with bar 8’s higher high. However, if the Nasdaq should selloff this week, it would be likely the active TD Sell Setup will be cancelled if the weekly close is below 4914.54. On the RUT, a qualified TD Sell Setup @9 is recorded, making it more vulnerable to a selloff. Screen Shot 2016-04-24 at 11.03.53 AMScreen Shot 2016-04-24 at 11.12.17 AM

Regarding the equity markets as a whole, there is nothing concrete to say a significant selloff is underway. The missing narrative is the big down candle. That’s for the medium term. The bigger picture suggests the S&P 500 (SPX) 1810.10 low on February 11, 2016, is history and the next big move is to the upside. The breadth of the market rally has been substantial and supports higher prices. Fed day comes this Wednesday and that is the focus for direction.


S&P 500 (SPX) SHORT TERM OUTLOOK: 

Apologies for not posting this timeframe. There are bugs in the 4 hour chart, and it is not reading correctly. I should be able to resolve this soon.  


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

Neutral if SPX closes above 2100.80.

Screen Shot 2016-04-24 at 11.36.05 AMConsidering the SPX close came less than a point of the TD Trend Factor and the weekly close did not close above the 2104.27 TDST Resistance level, Friday’s bearish price flip will receive the benefit of the doubt. Any reverse bullish price flip this week will revert the outlook back to neutral.


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

Bearish if weekly SPX closes below 2072.78 on Friday, April 29, 2016

Screen Shot 2016-04-22 at 8.27.59 PMIn the bulls favor, the higher high and close beyond the “9” count TD Sell Setup indicates the trend still has momentum. For the waiting bears, the inability to establish a close above the TDST Resistance at 2104.27 keeps the current outlook as cautious. A close below 2072.78 will swing the outlook to negative.


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

Bullish if monthly SPX closes above 2107.39 or Bearish if monthly SPX closes below 1850.61, the weekly TDST Support level on Friday, April 29, 2016. 


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