The TDST level at 1652.45 looks like an important marker as yesterday’s close on the S&P 500 (SPX) closed at 1652.32. Looking at the two hour chart, the bears want to see more separation from the TDST level at 1652.45 since the four hour chart still has an active TD Sell Setup. A close below SPX 1640.44 today will negate the four hour chart and things will look good for the bears again. If SPX continues to ‘hang around’ the 1650 area, the bulls are still in control. In the event the four hour TD Sell Setup does complete a 9 count, prices need to reverse and start trading towards under 1652.45 immediately or the prospects of a downturn diminishes. I do not trade crude oil but oil – specifically Light Sweet Crude Oil Futures (CL_F) – is starting a massive run that could elevated for some time. The weekly Keltner/Bollinger bands were in the process of volatility squeeze and it has been unleashed this week. These squeezes usually forewarns a process of directional moves and given oil has been held up in a trading range for almost two years, the upward momentum could be large. To add to the weekly confluence, the monthly Keltner/Bollinger bands are on the verge of breaking out as well.
Managing the short side now but staying vigilant as long as the four hour TD Sell Setup is still active. The release of the Fed minutes today may provide the catalyst. (updated intraday)