The alternating price flips on the 2 hour and 4 hour S&P 500 (SPX) charts are now indicating a neutral environment. However, there is a persistent selloff that is currently occurring. Since SPX 1630.25 are both the opening prices for the 2 hour and the 4 hour charts on their respective low bars, a close below 1630.25 is the designated sell trigger at the end of the session. If the recent low of SPX 1627.47 holds intraday, the short term bullish element still exists as outlined from yesterday’s post. But if 1627.47 is broken and closes above 1630.25, then the picture tilts neutral to bearish.Here are the remaining charts on the SPX, Dow Industrials (DJI), Russell 2000 (RUT), and the Nasdaq Composite (COMP). Although many of the weekly and monthly charts are in an uptrend, the clustering of DeMark 9’s and 13’s since May are suggesting that the markets are set up for a trend change. Concentrating on the monthly charts, the SPX monthly will record a Dark Cloud Cover candlestick pattern. The Dow monthly looks even more ominous with a Bearish Engulfing candlestick pattern. For the monthly Nasdaq, there are no bearish candlestick patterns yet but it will finish with a ‘perfected’ TD Sell Setup with the high of bar 8 above bar 6 and bar 7. The monthly RUT also has a Dark Cloud Cover but it is at the 50% mark of the previous month’s body which is ‘less’ bearish.
No matters what happens today, I am staying on the sidelines. Since my preferred timeframe for trading the indexes are short term, and the US markets will be closed next Monday, I do not want to get caught on the wrong side of the trade and not be able to sell out of it. My hope is the SPX bounces from here and stays neutral. Note: I just finished listening to John Kerry speaking on the Syria situation. My thoughts if there was a declaration of a military strike, I would think Obama would be the one who makes the address at the podium, not Kerry. (updated intraday)