US markets are static despite a hurricane of events. In regards to TD Sequential, the four-hour timeframe on the S&P 500 (SPX) still has the potential to complete a ‘perfected’ 9 count TD Sell Setup as long as the daily close is above SPX 1613.20. A close below will suggest the TD Sell Setup on the four-hour will not reach the ‘perfected’ state and prices should fall. The constant churning under the 50 day moving average and key Fibonacci levels also gives support to the bear side. The ‘dark horse’ bullish case is very much alive as written in the June 28th post. Add to the current bullish picture, breadth expansion is near a bullish trigger.
My thoughts – With european markets getting trashed this morning and Egypt in a volatile situation, I was expecting the SPX to the same. But the 50 day MA which is now my bull/bear marker of choice is acting as a dog leash when SPX gets too far away. Trading this market is difficult considering the US markets will be closed tomorrow and the jobs report will be released before the opening on Friday. My sentiment is if Friday is bearish, there will be enough of a catch-up with the rest of the global markets to the downside. Same for the upside. A break of the upside, especially above the 50DMA, could be sustainable. It is ‘could be’ since the SPX has to reconcile with the ‘perfected’ four-hour TD Sell Setup. My thoughts it will go into TD Sell Countdown. Positioned neutral now and a bearish reaction Friday is a sign to short. Bullish reaction is a sign to get long but must stay above the 50DMA. (updated intraday)