The S&P 500 (SPX) is still locked in a two way trading arena but I am keeping an open mind that a really bullish move can sprout which is briefly discussed below. But for now, the four hour DeMark 9 count TD Sell Setup is still active and will remain active if SPX can close above 1603.62. If the market continuously trades under the 1620 level, the TD Sell Setup will eventually break and the likelihood, the next bearish wave will resume. If it churns above 1620-1630 and the TD Sell Setup stays active, that would indicate a more bullish picture and SPX 1650 will be challenged. The TD Sell Setup is due next late Monday or early Tuesday so we’ll monitor the status of it and the Fibonacci retracement zones and maybe there will be a confluent short setup.
I am intermediate bearish but there is one very bullish wave higher that I am looking for signs for. It’s a ‘dark horse’ but given the market has made a clean Elliott A/B/C wave, it is completely plausible that a final wave higher can be a barn burner. A concoction of volatility and short sellers and bulls forced to play catchup perpetuates a vertical market. There are typically minor retracements and the market quickly reverses to the upside. The chart above is a SPX 2010 analog of such a move but you can search out similar patterns on your own to to see what I am eluding too. A followup on poor Apple (AAPL). Since the last post on June 20th, it has tracked lower and now meeting strong support. Given AAPL is not just selling off in a corrective way but in a structural way, we may have to look at longer time frames to gauge when the next significant bounce may occur. Since AAPL is currently trending down with the Keltner/Bollinger channel as shown on the daily chart, AAPL is on the verge of breaking a new low. It may not be as bad as it seems. Referring to the the monthly chart, AAPL is moving towards a 9 count TD Buy Setup so it is also ready to make a more significant bounce. Here are the conditions that should be met. To ‘perfect’ the 9 count TD Buy Setup, AAPL needs to record a print equal to/or lower than 385.10. If that requirement is met, then AAPL is free to move higher. The closer AAPL gets to 377.68 will be a good risk/reward long setup. If AAPL closes July below 377.68, the overall picture will be bearish. We’ll continue monitoring this.
Since the market is coming into a holiday next week, volume will be down but moves can be sharp. It’s a bull/bear trading market but new clues of market direction are coming. Now positioned neutral but if SPX closes below 1603.62 today, I will be inclined to look for fresh shorts next week. (updated intraday)