Monday, February 27, 2017

While equities are adding to records, the US Dollar and 10 year Treasuries are still seeking direction. However, 10 year Treasury yields as shown by the daily CBOE 10 year Treasury Index (TNX) has shown a crack. The daily TNX closed under the 23.27 TDST Support last Friday, which provides a glimmer of things to come this week. There a few variations after a TDST breach, but if the TNX is to project lower, another close below the 23.27 TDST Support will help validate that projection. Keeping an eye on the bigger picture, the monthly TNX is still in play for higher rates.tnx-dailytnx-monthly

Still awaiting a bearish price flip on the S&P 500 (SPX) index. It has not happened, but it is closer now than last week for the daily SPX. 


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

Bearish if daily SPX closes below 2365.38 on Monday, February 27, 2017 

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

Bearish if weekly SPX closes below 2297.42 on Friday, March 3, 2017

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

Neutral if monthly SPX closes below 2126.15 on Tuesday, February 28, 2017


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Tuesday, February 20, 2017

dxy-dilyEquities continued their run to higher highs and all timeframes on the S&P 500 (SPX) are on extensions past TD Sell Setup @9, mirroring strong price momentum. Although monetary policy or the intrigue of the shape of fiscal policies to come have not weighed on equity markets, it has bounded the US Dollar Index (DXY) in a range defined by TDST Support and Resistance levels. If DXY moves below 99.43, we can expect equities to be supported as cheap money continues to supply more fuel for equities. If the DXY moves higher than 101.80, the assumption will be fiscal related policies may be difficult to deploy, and equities may suffer as well. Once the DXY gets to these juncture points, another assessment is necessary since they are other TD variables involved. For the S&P 500 (SPX), a reversal of some type is still expected soon despite the daily SPX recording a TD Sell Countdown @13 right below the 2323.89 TD Trend Factor on February 9th. 


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

Bearish if daily SPX closes below 2337.58 on Tuesday, February 21, 2017 

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

Bearish if weekly SPX closes below 2294.69 on Friday, February 24, 2017

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

Neutral if monthly SPX closes below 2126.15 on Tuesday, February 28, 2017


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Monday, February 13, 2017

The sweet spot for a reversal that started on December 13, 2017 and ended when the S&P 500 (SPX) made new highs on January 24, 2017 has passed us. The next best chances for a reversal are coming up this week. Here are some timeframe by timeframe thoughts about where we could be heading: The rally on the monthly S&P 500 (SPX) is being validated by the upside move in the TTM_Squeeze indicator. Further confirmation can come if the monthly SPX can close above the TD Risk Level at 2367.62. From the weekly perspective, the SPX is barely under its TD Risk Level at 2319.07, but the TD Sell Countdown is in its middle stages, suggesting higher prices ahead. Now this brings us to the daily SPX where it gets a bit more interesting. The daily SPX has already recorded a TD Sell Countdown @13, and nearing the TD Trend Factor at 2323.89. A TD Sell Setup @9 and TD Combo Sell @13 can record this Tuesday and Wednesday. If this occurs, it will be all about the nature of the selloff. Will it be similar to the previous selloff which was a month long sideways consolidation? Will it be a typical 3-5% selloff which brings the SPX back to the bottom of the trading range around 2250, or will it be something more severe and create a bearish price flip in the monthly SPX? Since the longer duration timeframes are bullish, the 3-5% selloff is more probable at this point. 


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

Bearish if daily SPX closes below 2293.08 on Monday, February 13, 2017 

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

Bearish if weekly SPX closes below 2271.31 on Friday, February 17, 2017

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

Neutral if monthly SPX closes below 2126.15 on Tuesday, February 28, 2017

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Monday, February 6, 2017

Here is Wayne Whaley’s Nov 19 – Jan 19 studies, which is now presented annually. Wayne Whaley is a former recipient of the Charles Dow award using statistical analysis to gain an edge. While he develops quite a few studies, we picked up his Nov 19 – Jan 19 performance barometer to help determine market direction for the remainder of the year.whaleyBy measuring the S&P 500 (SPX) performance from November 19 – January 19, results has some predictive value for the remainder of the year. Positive performances of 3% or more resulted in gains in the SPX every year since 1950 except for one – The crash of 1987. Gains between 0 – 3% has shown mixed results, but positive for the most part. Negative performances generally shows negative results. Looking back to the results for 2016, the November 19 – January 19 performance recorded a negative 9.71%, but the SPX almost managed a double digit return, going against the statistical consensus. Currently for 2017, the November 19 – January 19 performance recorded a result of 3.75%, which surmises a positive 2017. With the monthly TD_Squeeze (see monthly SPX chart) indicating higher prices, and the potential rollback of financial regulations, the support for a positive 2017 is there. However, the one derailment of performance results of 3% or more occurred during the crash of 1987. Although equities can be considered inexpensive, and economic performance is generally positive, the market just seems one balloon pop away from something drastic. 

For the current TD markers, the SPX continue to creep up to the 2323.89 TD Trend Factor. The daily SPX is close to recording a TD Sell Countdown @13 that may finally trigger something other than a trading range, and break a few TDST Support levels. 


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

Bearish if daily SPX closes below 2278.87 (daily price flip) on Monday, February 6, 2017 

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

Bearish if daily SPX closes below 2278.87 on Monday, February 6, 2017 

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

Bearish if weekly SPX closes below 2274.64 on Friday, February 10, 2017

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

Neutral if monthly SPX closes below 2126.15 on Tuesday, February 28, 2017

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Monday, January 30, 2017

The breakout rally from last week has been moderate, contrary to what would be expected given the duration of the trading range, which started from the middle of December. Using the daily S&P 500 (SPX), it would be expected to see the active TD Sell Setup take an easy path to a 9 count up to 2323.89, the TD Trend Factor. The inability to record a 9 count would put in question sustainability. 


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

Neutral if SPX closes below 2280.07 at the close of the session on Monday, January 30, 2017

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

Bearish if the SPX closes below 2276.98 on Friday, February 3, 2017. 

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

Neutral if monthly SPX closes below 2168.27 on Tuesday, January 31, 2017. 


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Wednesday, January 25, 2017

QUICK UPDATE: A bullish price flip at the close of Tuesday’s session with a new high and new closing high on the S&P 500 (SPX). This takes away the sweet spot for a meaningful selloff and the bear probability begins to decay. This resets all the TD counts and a new TD Trend Factor is set at 2323.89. If everything today was a false breakout, then the SPX needs to break below 2261.93, the 60 minute TDST Support in one or two days. spx-daily


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Monday, January 23, 2017

Another week of equilibrium between buyers/sellers. A fresh reassessment shows a conundrum for the daily S&P 500 (SPX). While the SPX has gone no where, there are some related indices that are experiencing very modest selloffs. The daily Dow Industrials (DJI) currently has an active TD Buy Setup @6. The daily Russell 2000 (RUT) also has a TD Buy Setup @6. dow-dailyrut-dailySince these TD Buy Setups are in the middle stages, any additional selling for all indices can be short lived for a few days before another test to the highs. If the SPX decides to breakout to the upside, there are many possibilities, but for those looking for an extensive rally, the most ambitious target will be 2323.89, the third degree TD Trend Factor. For the record, the monthly SPX risk level is at 2367.62. If a catalyst shows its presence during the week, we will provide a quick update. 


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: NEUTRAL

Bearish if daily close is below 2238.83 on Friday, January 27, 2017

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

Neutral if monthly SPX closes below 2168.27 on Tuesday, January 31, 2017


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