The S&P 500 (SPX) price flipped bearish at the close of Friday, July 30th. With TD Sell Setup off the table, the SPX should begin a choppy August to start, and resolve lower. Even though the high of 4429.97 was recorded with a TD Combo Sell @13 last Monday, July 26, the SPX can meander a bit longer until TD Sell Countdown records a 13. Look for a possible alignment when next Friday’s employment numbers are released. If SPX resolves lower, the debate can begin for the market falling 5.5% or greater vs the habitual 2-3% drawdown.
The weekly SPX is currently in price exhaustion territory with an already perfected active count of TD Sell Setup @8. This supports the daily chart signaling a pullback is nearby. For illustration purposes, the shaded areas are drawdowns when marked with a TD Sell Setup @9 or TD Sell Countdown @13.
With the monthly SPX, the TD counts are TD Sell Setup @9 + 5. If August provides a 5.5% or more correction with a close below 4181.17 on August 31st, that will be the first step in acknowledging the long term trend is being challenged. With continuous injection of liquidity by the Fed and present fiscal policy, that scenario is likely deferred.
Bitcoin (BTC) had a monster week, and currently placed at TD Sell Setup @9 + 1. For BTC to remain convincingly bullish, it needs to trade around the 40k level or simply push higher keeping the TD Sell Setup intact. Trading around 40k will help BTC resolve higher into TD Sell Countdown.
A nice selloff last Monday, July 19th was outdone by even a nicer bounce the following day on July 20th. The rebound was off the confluence between the short term two & four hour TD Buy Setup @9, and coupled with a perfected 10 year Treasury TD Buy Setup @9. The rally was extremely sharp and brought the S&P 500 (SPX) back into all time high territory to end the week.
From the four hour chart above, the SPX should continue to clear the 4393.68 TDST Resistance level. Expect a TD Sell Setup @9 to record on Tuesday AM right before another FOMC announcement will commence on Wednesday, July 28th. This is in conjunction of with many market moving earnings reports will be delivered during the week. The short term charts are extended therefore volatility around mid week should be expected. But in context with the intermediate charts, the primary trend should continue to hold. The deciding premise is if 4393.68 can hold, the four hour SPX can transition to TD Sell Countdown which supports the general bullish trend.
From the daily SPX, TD Sell Setup @9 was recorded on July 2nd, followed by a 3.5% pullback above the 4217.27 TDST Support level. With the current new high, the daily SPX count is in the TD Sell Countdown trend phase. Some volatile chop should be expected after the FOMC announcement as discussed earlier, but the SPX is more positioned to move higher than lower.
Next week the weekly chart will enter price exhaustion territory with a TD Sell Setup 8 count starting next week. Staying in pace with other timeframes, the first week of August might make a stronger case for a potential reversal point. Note TD Sell Countdown is on count 7, which raises the possibility a significant drawdown may not occur until after the Summer.
Bitcoin (BTC) finally reached some downside price exhaustion last Tuesday, July 20th. At the time, BTC had an active TD Buy Setup @8. Although the following Wednesday’s rally price flipped before it could record a TD Buy Setup @9, look towards the 33330.88 level as a precursor to more upside. There are enough on-chain catalysts that makes a rally promising.
Unlike BTC, Ethereum (ETH) did record a TD Buy Setup @9, and the TDST Resistance level at 2325.46 is more defined. Switching to a more bullish stance along with BTC. This will strengthen if the recent low is tested, but unable to make a lower low.
A stealth intraday reversal last Tuesday halted the S&P 500 (SPX) TD Sell Setup. The selloff so far is contained which makes next week a pivotal week. For the near term outlook, a counter move higher should occur early Monday. The 60 minute SPX is about to record a TD Buy Setup 9 count near the TDST Support level at 4322.04. The TDST Support level is also shared by the 45 minute and 120 minute chart which marks 4322.04 as significant. Ultimately, this is the level to watch if tested.
From a daily perspective, the SPX is now active with a TD Buy Setup @2. The SPX is under the TD Risk level at 4390.92 which keeps the pullback process intact.
The 3 day SPX has recorded a TD Sell Countdown @13 on July 7th, but has not fulfilled a TD Sell Setup 9 count yet. To help bring confidence a correction is progressing, if the SPX closes below 4319.94 on Monday, July 19th, that will price flip the 3 day chart bearish. If above 4319.94, the next alternative is for a close below 4343.54 by Thursday, July 22nd. If none of those bearish options occur, expect the 3 day SPX to finalize the TD Sell Setup with a 9 count which should record one more higher high before another price exhaustion marker is recorded.
The weekly SPX TD Risk level is still valid for a reversal by closing under 4347.49 before recording three consecutive higher closes. Each Friday selloff by far has been countered with a strong rally the following Monday. We’ll see what next Monday brings. Ultimately, what happens in the first part of the week will clarify positioning.
Since Bitcoin (BTC/USD) recorded a perfected weekly TD Buy Setup @9 on Sunday, June 27th, there has not been any upside resolve. BTC is now puncturing the 8 hour TDST Support level at 32,002.21 as shown from the daily chart on top. One more lower low should bring in some buyers though it has much work to do before calling for a new uptrend.
If there is an upside surprise for crypto, it would come courtesy of Ethereum (ETH/USD). The daily chart has recorded a TD Buy Setup @9 above the 1807.89 TDST Support. A good argument can be made for a move to the upper end of TDST Resistance level at 2325.46. A break below 1807.89 TDST Support would signal more doldrums in the crypto space.
It’s risk on again after another brief selloff. The US 10 year Treasury note is in charge for the current cycle and from the daily CBOE 10 year Treasury Index (TNX) chart, it has recorded a TD Buy Setup @8 which usually signifies price exhaustion is near. However, in closing the week, the sentiment change was strong enough to indicate a bottom has already been made. This suggests TNX may not record a ‘perfected’ TD Buy Setup @9 or even record a 9 count. This supports equities – especially those tied to reflation. In the event a perfected TD Buy Setup @9 records by trading at 12.68 (1.26%) at the least, it will likely come on Tuesday when CPI numbers are released or Wednesday when Jerome Powell testifies on monetary policy . This should only be a brief disruption since the ‘perfected’ 9 will be buffered by the TDST Support at 11.59 (1.59%), which provides another opportunity for dip buyers.
The S&P 500 (SPX) has recycled the DeMark counts by ending the week with fresh all-time highs. This should signal more gains ahead. From the daily chart, the DeMark count is TD Sell Setup @9 + 4. Collating other nearby timeframes, the next price exhaustion level can point to the week of July 19 – 23. The TD Trend Factor at 4551.41 is for reference for the time being. Closing below the previous all time high of 4361.60 will place doubt on the strength of the SPX.
If the SPX can sustain a divergence free rally, the Russell 2000 (RUT) will need to break out above the 2340.55 TDST Resistance. The quicker the better. Falling below the 2205.73 TDST Support while the SPX moves higher only serves as an unhealthy market and dangerous one at that.
For any consideration to the downside, the weekly SPX will need to close below the TD Risk level at 4347.49. At the very least, a red candlestick to end the week.
Bitcoin is still challenged and a lower low is the base case before a major reversal can take place. The near term 8 hour TDST Support at 32,002.21 is currently holding prices. While there has been institutional interest, one more downside flush a major low should see more from the ‘whales’.
By all measurements, the S&P 500 (SPX) is in position to retrace lower starting next week. The daily SPX not only recorded a TD Sell Setup @9, it also met and surpassed the TD Trend Factor at 4344.39. A selloff should not be a surprise to anyone therefore it’s a question of how it squiggles around. The easy part may be a drawdown to the 60 and 120 minute TDST Support cluster at 4291.46 and 4293.58 respectively. From there, the hard part will be the backing and filling that comes after that. A break below 4290 would suggest a deeper retracement.
The Nasdaq Composite (COMP) has taken the leadership role. It recorded a TD Sell Setup @9 which was perfected at the end of the week. If a selloff ensues, expect the Nasdaq to lead to the downside.
The Russell 2000 (RUT) has been the outlier and has not felt the same bullishness as the SPX and COMP. The RUT can break above the 2340.55 TD Resistance level and usher in new leadership or trade below 2205.73 TDST Support and grant a signal to other indices not all is well.
The weekly SPX breached the 4347.49 TD Risk level. This is just for observation since it is not significantly material until there are three consecutive higher highs above 4347.49.
What has recorded three consecutive higher highs above the TD Risk level is the monthly SPX. This is material as it suggests in the longer term, the SPX should stay on track to record a TD Sell Setup @9 and place the TD Sell Countdown portion on a path to a 13. This bodes well to stay overall bullish through the end of the year.
A look at the quarterly SPX timeframe. This has a good probability of recording a TD Sell Setup @9 and converging with a TD Sell Countdown @13 around mid 2022. Is SPX 10k out of the question?
Bitcoin (BTC) remains in the 30k – 40k trading range. The two top near term scenarios remain. Either BTC draws below 30k and flush out the still exuberant retail buyers and draw back in the range again or BTC can take out the 39554.98 daily TDST Resistance level and attempt to rally to 47k where the major resistance exists. That is expected to fail and draw back down to 30k again.
A surprise reversal in the overnight equities futures took out the bearish option fairly quickly last Monday, June 3rd, and the result has the S&P 500 (SPX) recycling upwards. With the daily SPX on an active DeMark TD Sell Setup @4, the bullish run should continue through next week. Auxiliary effects that can contribute to higher prices are end of quarter window dressing and the “never short a dull market” axiom since next week is a week before a market holiday which traditionally has lighter volume. Note the TD Trend Factor at 4344.39 is still intact. A TD Sell Setup 9 count right at 4344.39 would set up another potential reversal when the time comes. If a selloff comes prematurely, the first confirmation comes when the SPX is drawn below 4241.43, the current 90 minute TDST Support.
By breaking the 14211.57 all time highs, the daily Nasdaq Composite (COMP) has all the makings of another sustainable up trend. When the price exhaustion signals come in the second week of July, any drawdown that does not overlap 14211.57 should confirm that overall bullish uptrend.
If the daily Russell 2000 (RUT) can close above the daily TDST Support at 2340.55, that will indicate all indices are becoming more correlated and less bifurcated.
The weekly SPX has room to move higher. A headwind should come in the middle of July as suggested earlier as the timeframes from the daily to the four day charts should be recording DeMark price exhaustion signals. On the chart there are three shaded areas. They represent all the recent periods the SPX closed the week on a bearish note only to completely reverse bullish to open the following week. It happens, but the frequency of these bear traps is interesting to note.
A longer time frame look at Bitcoin (BTC) through the weekly chart. Now that BTC recorded a perfected weekly TD Buy Setup @9, it gave the first long term price exhaustion signal. The first bullish indication would require BTC to break out above 41322.55 on an 8 hour basis. That would at least open the door to 47k where likely the most overhead supply exists. A lower low below 28800 would probably do more damage to sentiment than dent the potential for a bullish counter trend. However, below 21858.46 without a subsequent recovery would indicate BTC is in a long road to recovery as the weekly is moving to the TD Buy Countdown phase of TD Sequential
While the S&P 500 (SPX) followed through with a reversal from the post FOMC announcement, sector rotation gave a cushion for what could have been a more severe selloff. While financials, industrials were weak, tech was relatively strong. Next week could see a reverse rotation as sectors such as the SPDR Financials (XLF), SPDR Industrials (XLI), and the SPDR Materials (XLB), are at interim selling exhaustion levels with recorded 9 count TD Buy Setups, and tech such as the SPDR Technology (XLK) has not shown direct weakness yet. Overall, this should keep the SPX weak. For next week, the primary levels are drawn on the 4 hour SPX chart which currently has a TD Buy Setup @5. If we project a 9 count, next Tuesday could see support around the 3% drawdown level which is doubled up with a 61.8% Fibonacci level. Although preliminary, if we project an ultimate target, that will place it at 4020.46 (about 5.5%). If that target is the last stop, the SPX upside reaction needs to close above 4071.19 on the 4 hour timeframe.
Although the daily SPX price flipped bearish one count before a potential TD Sell Setup @9, TD Combo Sell did record a 13 last Monday, June 14th. From the daily SPX chart above, the same levels as the 4 hour timeframe are drawn. The daily currently has a TD Buy Setup @3. Given the bifurcated rotation, it is likely the SPX will be choppy enough to mask any recorded TD Buy Setup @9. As a result, the shorter term timeframes will have more importance to identify key turns. This is especially true when volatility is rising.
The daily Nasdaq Composite (COMP) has been relatively strong on back of the yield curve flattening post FOMC announcement. Although the COMP, QQQ, or the NDX did not record any DeMark price exhaustion markers, the XLK did as it recorded a perfected TD Sell Setup last Thursday, June 17th. The expectation is for the Nasdaq component to exhibit weakness for next week. Since the XLK has recorded a TD Sell Setup @9, it will help provide structure to potential support. With the 9 count recorded, the XLK TDST Support is at 137.38. The equivalent for the COMP is 13614.51, and 330 for the QQQ. These are very key support levels.
The weekly SPX closed the week at the lows and if weakness persists, the first step is for the weekly to produce a bearish price flip by closing below 4204.11 next Friday, June 25th.
The head scratcher chart belongs to the CBOE 10 year Treasury Index (TNX). Counter to what was expected which was the 10 year rate to move higher, it actually closed to a lower low post FOMC day last Wednesday. This development is intriguing and should provide near term choppy positioning for stock sectors before it sorts itself out. For next week, expect the TNX to stay in range and flip to the upper end, This should provide support for the XLI, and weakness for XLK. In context to the SPX, expect tech to retrace lower while the likes of the XLI to stabilize resulting in a lower SPX.
Bitcoin (BTC) woes continues. It did not have enough strength to reach the 45k area. If we correlate the crypto and equity markets together, it’s a matter of time before BTC sees lower lows or at least a solid test to the low end of the current If there is another attempt to the upside, the primary level to hold is the 6 hour TDST Support at 34,898.74
The S&P 500 (SPX) was able to pull through last week’s resistance marker with new highs. The timing of an anticipated reversal is now moved to next Wednesday, June 16th, when the daily SPX can record a TD Sell Setup @9. On back of that, TD Combo Sell is one count away from a 13. The requirement is to record a high and close above both the previous day’s high and close, and record a close equal to / higher than the high of the prior bar two days ago. Coincidentally, June 16th is another FOMC meeting. With CPI inflation at 5%, the pressure to at least signal a rate rise has to be in the conversation.
The Nasdaq Composite (COMP) found a resurgence by surpassing the TD Risk level at 13894.13. It can also record a TD Sell Setup @9 on June 16th. The active TD Sell Countdown currently on a 6 count will be reconciled after the effects of the surmised reversal.
The Russell 2000 (RUT) recorded a perfected TD Sell Setup @9 last Monday, June 7th. The TD Risk level at 2356.35 takes precedence over TDST Resistance at 2340.55. Prices in the RUT should also see pressure to reverse along with the SPX and COMP.
Counter intuitively to the hot CPI numbers, rates has been trending lower. That should also change on Fed day when the CBOE 10 year Treasury Index (TNX) can record a TD Buy Setup @9 on the same day. The assumption here rates are predisposed to pop higher no matter what Jerome Powell signals, which should be a drag on equity indexes.
Nothing material on the weekly SPX. Still trending higher.
Bitcoin (BTC) appears to have two near term paths. Visually BTC can continue to descend into lower lows, and once it pops below 30k, other DeMark price exhaustion signals can be sought. The other path is mildly bullish. TDST Resistance sits at 39291.24 on an 8 hour timeframe basis. A breakout above that can bring in buying. However, note the weekly chart has not been perfected even though a 9 count has been recorded. Therefore, even with a short term breakout, this could eventually bring in more sellers and print a lower low. From that point a more constructive consolidation for sustainable buying can be sought.
An inline jobs print was able to reverse any bearish acceleration that was setting up. The close of the S&P 500 (SPX) was good enough to narrate higher highs, but not good enough to derail potential weakness ahead. The two hour SPX above shows two consecutive closes above the 4227.54 TDST Resistance. To remain short term bearish, the SPX needs to close below 4227.54 on a two hour basis on the opening next Monday and close continuously under it. Continue to trade above it, bullish momentum can carry through the latter part of the week.
Nothing to glean on the SPX itself. Since the qualified TD Sell Countdown @13 recorded on May 21st, there has not been any recognized reversal. Part of DeMark axioms state it can take up to 12 days trading before a 13 activates. Currently there has been 9 trading days recorded.
Note the daily SPDR ETF (SPY) has a different look than the SPX. The SPY can record a TD Sell Countdown @13 next Monday with a close above 419.99. This offers another potential reversal early next week.
The Nasdaq (COMP) had a strong reversal just when it looked like it was gaining downside momentum. The TD Sell Setup @9 recorded last Friday. May 28th is intact, but a close above 13,894.13 would be a concern for those bearishly inclined.
Lastly, the Russell 2000 (RUT) which has rangebound for about 3 months, can record a perfected TD Sell Setup @9 with a 2302.22 print or higher. Other similar charts not shown are the Dow (DJI), and the Oil/Gas (XOP) and Financials (XLF) sectors.
If we put everything together, the all the daily charts point to another push higher to accomplish their respective TD Sequential counts, followed by a reversal. If this scenario were to remain on track, the two hour SPX should begin to fail with an initial burst higher on Monday. Nasdaq price action is also key for price direction as written earlier.
The weekly SPX is technically working off the TD Sell Setup @9 recorded May 7th. There has been 4 weeks of sideways range and getting close to a definitive TD Sell Countdown, currently on a 2 count.
Bitcoin (BTC) holding above the universal 30k support level. Straight to new highs doesn’t seem likely at this point. BTC can get to 50k, fail and retest or just fail. The four hour TDST Support level at 36472.02 can serve as an early warning of a breakdown for the weekend.
Although market volume was pre holiday slow, the S&P 500 (SPX) was bullish overall for the week. If we follow the daily SPX TD Sequential for a TD Sell Setup @9, it calls for price exhaustion next Friday, June 4th. The TD Sell Countdown @13 recorded last Friday, May 21st, is still viable. If the 4 hour and the daily SPX price flips bearish, the SPX may have already started pricing lower before June 4th.
The daily Nasdaq Composite (COMP) has recorded a TD Sell Setup @9 as of Friday, May 28th, providing a path to start reversing starting next week. Note the TDST Support at 13,072.23 is not the true TDST Support level since the currentl TD Sell Setup @9 is contained inside the previous TD Sell Setup @9 range back in March 30th. The true TDST Support level remains at 12922.57. The main takeaway of all this is for a reversal to occur anytime starting next week.
The weekly SPX which recorded a TD Sell Setup @9 last Friday, May 7th, continues to put a lid on higher prices, but no significant downside yet.
The monthly SPX closed right above the 4175.24 TD Risk level for the second consecutive month. To help position for the future – For June, the monthly SPX can help confirm the TD Countdown count if it closes above the May close of 4204.11. That would be bullish. A close below 4175.24 would state the TD Sell Setup @9 recorded last March 2021 is still viable. That would lean bearish.
Bitcoin is having problems. There are too many confident dip buyers and since price action has not produced any sign of selling relief, another retest of the 30k lows is in the cards. This would be coincident with the SPX if it reverses.
An astonishing and more dire case comes from the weekly chart. BTC weekly has an active TD Buy Setup @7. If we extrapolate this, the weekly can record a 9 in two weeks. If coupled with a daily TD Buy Countdown @13, this will be a compelling buy when BTC can truly capitulate. Note the TDST Support is near 10k!
-Notations in “R” specify the current count has been recorded and will remain there until there is a recorded reverse TD Setup.
EXAMPLE: If the “SS” field is populated with a number, then the dominate count is TD Sell Setup. The corresponding “SC” and “CS” cells will give the depth of the trend with counts between 1-13 with 13 signaling a possible trend reversal. If the opposite fields, “BS”, “BC”, “CB” has a “R” entry, that means those counts have been recorded but there may be a risk TD Buy Setup (BS) can “recycle” into a new count. The “R” will remain until TD Sell Setup (SS) records a 9 count.
