QUICK UPDATE:
The preferred straight line to reach 2806.79 for the S&P 500 (SPX) took a different turn today. The SPX is not broken, but it is certainly bent.
More short term churning is expected, but closing below the 2635.34 TDST Support on the daily SPX either Tuesday or Wednesday is problematic for equity prices.
The bullish initiation from last week came from the the 4 hour SPDR S&P 500 (SPY). It recorded a TD Buy Setup @9 and a TD Buy Countdown @13. Visually, the SPY now looks to to be setting up short term bullish. The next hurdle would be the 280.44 TDST Resistance. Probability of the SPY breaking out from 280.44 partly depends on the relation to the active 4 hour TD Buy Setup and/or other timeframes. Prognosticating outward, equities still look locked in a trading range.
S&P 500 (SPX) SHORT TERM OUTLOOK: BULLISH
Bearish if SPX closes below 2691.27 (contingent on 2 hr SPX recording a TD Sell Setup @9) at the close of Monday, November 19, 2018.
S&P 500 (SPX) SHORT/INTERMEDIATE TERM OUTLOOK: NEUTRAL (bullish if aggressive)
Bullish if SPX closes above the 200 DMA or bearish if SPX closes below the 2701.58 on Monday, November 19, 2018
S&P 500 (SPX) INTERMEDIATE/LONG TERM OUTLOOK: NEUTRAL
Bearish if SPX closes below 2658.69 on the close of Friday, November 23, 2018
S&P 500 (SPX) LONG TERM OUTLOOK: BEARISH
Neutral if SPX closes above 2816.29 at the close of Friday, November 30, 2018
The chart above shows the weekly e-mini S$P 500 futures (ES) recording two consecutive closes below the 2762.50 TDST Support level (S&P 500 equivalent is 2759.82). That gave a strong propensity for the ES to continue to deteriorate in price. However, the midterm election melt up last Wednesday helped place the weekly price action above 2762.50 and price flip bullish. The top interpretation now is for the ES or SPX to trade in a range from last October’s highs and lows. Another important aspect to the TDST Support rejection is you usually see a retest of the lows, which is likely happening now. To justify this interpretation, there should be an agreement between other related indices.
The weekly small cap Russell 2000 (RUT) shows one close below the 1527.71 TDST Support followed by a close above it. This interpretation is generally bullish, but if the depth of the pending retracement is deep undercuts the low, then future trading action is more on par with the SPX which is neither bullish or bearish trading range.
Then you have the weekly Nasdaq Composite (COMP) which shows the Nasdaq tagging the 6926.97 TDST Support level before trading higher. Note that the TD Buy Setup is still active @7. This indicates that even if the Nasdaq sells off to complete a 9 count, it should terminate around the 6926.97 level plus or minus. This is a good leading chart to follow.
Finally, back to the monthly iShares Emerging Market index (EEM) again. It just needs one more lower low against the 37.26 TDST Support level and that will be the minimum to satisfy the perfection rules of TD Buy Setup. Bringing this all together, the SPX bear market discussion has weakened, or at least delayed. The current picture shows a retest of the lows this week or the following week. Depending on the response, assumptions can be made if there will be a retest of the highs.
S&P 500 (SPX) SHORT TERM OUTLOOK: BEARISH
Bullish if SPX closes above 2809.07 at the close of Monday, November 12, 2018
S&P 500 (SPX) SHORT/INTERMEDIATE TERM OUTLOOK: NEUTRAL (bearish if aggressive)
Bearish if SPX closes below 2755.45 at the close of Monday, November 12, 2018
S&P 500 (SPX) INTERMEDIATE/LONG TERM OUTLOOK: NEUTRAL
Neutral until further notice
S&P 500 LONG TERM OUTLOOK: BEARISH
Neutral if SPX closes above 2816.29 at the close of November 30, 2018
The close of last Thursday’s trading session through Friday’s close could serve as a microcosm to what may come later this November. The market response between Apple’s earnings, favorable trade news, a hot jobs number, to a denial to the favorable trade news provided plenty of intraday volatility. Until the S&P 500 (SPX) climbs above the 200 Day Moving average currently at 2764 or breaks below the 2603 recent lows, volatile chop trading should continue.
Overall, lower prices is expected as the weekly SPX has now spent two weeks below the 275.47 TDST Support level of the SPDR ETF (SPY). The SPX equivalent is at 2759.82. The weekly SPY also shows two consecutive weeks below 275.42, the TDST Support level which suggests momentum is continuing to the downside.
Providing support for lower equity prices is the US dollar index (DXY). It is suggesting the retracement lower is about finished and set for another leg higher.
Furthermore, the CBOE 10 year Treasury Index (TNX) chart has the appearance that rates has worked off the TD Sell Countdown @13 and TD Combo Buy @13 back in early October is primed to move higher.
If the SPX continues the selloff, a major price low will occur in late November/early December as detailed in last week’s post. Other than the EEM scheduled for a bottom in November or December, the weekly SPX can record a price low in the last week of November (TD Buy Setup @8) or the first week of December (TD Buy Setup @9). As long as the weekly SPX does not close above 2767.13 this week, this will be the best predictive script going forward. Coincidently — the perfect backdrop to this scenario is the G20 meeting in Argentina that will commence in the last week of November.
S&P 500 (SPX) SHORT TERM OUTLOOK: NEUTRAL
Bearish if SPX closes below 2735.17 midday or below 2740.52 at the close of Monday, November 5, 2018. Bullish if mentioned conditions are not met.
S&P 500 (SPX) SHORT/INTERMEDIATE TERM OUTLOOK: NEUTRAL
Bearish if SPX closes below 2682.63 at the close of Monday, November 5, 2018
S&P 500 (SPX) INTERMEDIATE/LONG TERM OUTLOOK: BEARISH
Neutral if SPX closes above 2767.13 at the close of Friday, November 9, 2018
S&P 500 (SPX) LONG TERM OUTLOOK: BEARISH
Neutral if SPX closes above 2816.29 at the close of November 30, 2018
Now that the S&P 500 (SPX) has broken below the 200 day moving average and the 2759.82 TDST weekly TDST Support, selling has been persistent. Counter trend movements cannot get enough traction for more than a single trading session. With that, here are some scenarios for the days and weeks ahead.
If this market is heading for a bear market type decline, a major bounce in the SPX will likely coincide with the monthly iShares Emerging Market ETF (EEM). EEM is historically cheap enough where value investors can step in. From a DeMark perspective, a price bottom in the EEM may come in November or December, especially if EEM stays in proximity to the 37.26 TDST Support level. To refine the time period, the weekly SPX suggests the last week of November (TD Buy Setup @8) or the first week of December (TD Buy Setup @9) will indicate price exhaustion. However, by then, the SPX may have deteriorated so badly that US stocks would need quite some time to repair, and depending on the fundamental economic profile, volatility may rise again.
If US equities are still in the proposed long term sideways trading range, then stocks need to trade back above the weekly TDST Support level 2759.82 ideally this week. The e-mini S&P 500 (ES) equivalent is shown above with 2762.50 as the level to reach.
Looking at the present time, the four hour SPX has reached a perfected TD Buy Setup @9 illustrated by the SPX ETF (SPY) above. Coupled with a severely oversold market, the ingredients are there for a counter trend move higher. The larger question is will it be a quality move where the daily SPX can produce a bullish price flip. If not, and selling continues unabated, then expect a mini capitulation low later in the week.
S&P 500 (SPX) SHORT TERM OUTLOOK: NEUTRAL (Bullish if aggressive)
Staying neutral if SPX closes below 2628.16 mid session or at the close of Monday, October 29, 2018
S&P 500 (SPX) SHORT/INTERMEDIATE TERM OUTLOOK: BEARISH
Neutral if SPX closes above 2705.57 on Monday, October 29, 2018
S&P 500 (SPX) INTERMEDIATE/LONG TERM OUTLOOK: BEARISH
Neutral if SPX closes above 2885.57 at the close of Friday, November 2, 2018
S&P 500 (SPX) LONG TERM OUTLOOK: NEUTRAL
Bearish if SPX closes below 2718.37 at the close of Wednesday, October 31, 2018
With volatility elevated, shorter times frames are helpful in determining potential swings. Since the volatility index VIX is hovering around 20, the two hour S&P 500 (SPX) is the primary time frame shown above. It has already recorded a TD Buy Countdown @ 13 last Thursday, suggesting the selloff has temporarily exhausted itself.
The five minute chart supports the two hour timeframe for a move higher. For Monday, if the 5 minute SPX can briefly drop to the 2760 level, that will perfect the TD Buy Setup. Naturally the one concern is if the SPX continues to trade below the 200 day moving average currently around the 2770 level. Assuming the SPX can hold the 200 DMA, it has a chance to reach the two hour TDST Resistance at 2888.12.
S&P 500 (SPX) SHORT TERM OUTLOOK: BEARISH
Bullish if SPX closes above 2777.14 midday or above 2768.59 at the close of Monday, October 22, 2018.
S&P 500 (SPX) SHORT/INTERMEDIATE TERM OUTLOOK: BEARISH
Bullish if the SPX closes above 2809.92 at the close of Monday, October 22, 2018
S&P 500 (SPX) INTERMEDIATE/LONG TERM OUTLOOK: BEARISH
Neutral if the SPX closes above 2885.57 at the close of Friday, October 26, 2018
S&P 500 (SPX) LONG TERM OUTLOOK: NEUTRAL
Bearish if SPX closes below 2718.37 at the close of Wednesday, October 31, 2018
The 10 year Treasury Index (TNX) shown above is at price exhaustion levels, and it should help bring some stability to the equity markets before moving higher. Currently, the daily S&P 500 (SPX ) is currently sitting at the 200 day Moving Average. The weekly SPX is sitting at the 2759.82 TDST Support level. And the monthly SPX is sitting at the 8 period moving average – All major support levels. There was some support for the equities last Friday, but another flush lower Monday is in the cards as the four hour SPX and the daily SPX are on active TD Buy Setups @7. This is the basis on why the SPX may try to challenge the lows before moving higher. Once the short term counts exhaust themselves to the upside, another leg down becomes probable.
S&P 500 (SPX) SHORT TERM OUTLOOK: BEARISH
Bullish if SPX closes above 2770.09 on Monday, October 15, 2018
S&P 500 (SPX) SHORT/INTERMEDIATE TERM OUTLOOK: BEARISH
Neutral if SPX closes above 2880.34 on Monday, October, 15, 2018
S&P 500 (SPX) INTERMEDIATE/LONG TERM OUTLOOK: BEARISH
Neutral if SPX closes above 2929.67 on Friday, October 19, 2018
S&P 500 (SPX) LONG TERM OUTLOOK: NEUTRAL
Bearish if SPX closes below 2718.37 on Wednesday, October 31, 2018
 | Gary on Monday, October 22, 2018 |
 | Art on Monday, October 22, 2018 |
| Gary on Monday, October 22, 2018 |
| Gary on Monday, October 15, 2018 |
| Art on Monday, October 15, 2018 |
