Wednesday, June 19, 2013

ImageThe three most important words tomorrow – tapering, tightening, and accommodative. Here’s how things look utilizing DeMark’s TD Sequential as reference. The S&P 500 (SPX) four hour chart is my main choice when determining reversals. It serves as a good balance between long and short term charts and often gives an early look of what is in store for the immediate future. The SPX high today pressed near the 1654.51 TDST level. That would be bar 7 of the TD Sell Setup. For tomorrow, the first half of the day will begin with bar 8 and any price that is equal or greater than bar 7’s high of 1654.19 will achieve the bare minimum of price exhaustion. The second half will probably be the most volatile portion. It will also be the scene where a potential 9 count may occur. Anything up to SPX 1668 is fair game for an area of reversal but I’m keying on 1558 and 1668. Anything higher than SPX 1670 will require me to address the pending 13 counts on the daily indices.ImageImageImageThe Russell 2000 (RUT) is worth monitoring a bit closer now. It sports what looks like the DeMark’s version of a lunar eclipse. The daily chart looks like it has momentum to the upside as it closed above the 998.30 TD Trend Factor. There are also two competing counts. A 9 count TD Sell Setup and a 10 count TD Sell Countdown. If the RUT stays on cruise control, I will look to the 13 as the end all. Reason being the weekly is recording a 13 and the monthly is recording a 13. So if the RUT does achieve fresh all time highs, it should be marginal. 

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If the trading targets between SPX 1658 – 1668 are met in the first half of the trading session, I will position short ahead of the Fed announcement. I will also position short if the four hour TD Sell Setup fails to record a 9. Monitoring the continuity of TD Sequential time will serve a purpose as well. If the market has other intentions and stays north of SPX 1670, I will have to restate everything. Here’s the breakdown of the various TD Sell Setup timeframes and it will become obvious why I’m leaning short tomorrow: 60 minute – bar 7, 2 hour – bar 8, 4 hour – bar 7. (Updated before market open) 

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