This is my primary bearish outcome. The daily TD Sell Setup for the S&P 500 (SPX) is on bar 7. If the market rally stays sustainable, bar 8 and maybe bar 9 will record a high between tomorrow through the end of Friday. There are a few targets in the SPX 1690’s range. One is a sneaky 13 count TD Sell Countdown that goes back to July 9th that was never qualified. To qualify, bar 13 must at least match the close of bar 8 of TD Sell Countdown. That level sits at 1695.53. Furthermore, the TD Propulsion threshold that was broken a few days ago sets up the TD Propulsion Exhaustion level at 1697.96. TD Propulsion levels are generally soft targets but since it adds to the confluence of the 13 count TD Sell Countdown, it is worth mentioning. Then there is the standard 78.6% Fibonacci level at 1692.08. Include a potential 9 count TD Sell Setup and a buyer exhaustion point is identifiable.
If there is a intermediate bullish case, I will look towards the quality of the breadth. Using the McClellan Oscillator as my primary metric, either a sustainable move above the 100 level or entry above the 150 level serves as a good indicator that buyers are stepping in a big way. Currently it is just under the 100 line so I am staying intermediate bearish.
The other daily charts. Despite the fragmentation of the indices, they all have similar TD Sell Setup counts on this current leg higher.
It is quite possible the markets can begin to start rolling over at current levels as some readers eluded to but I would figure it would create an indecision phase until the FOMC release next Wednesday. Staying neutral as it is too late to buy and not enough reasons to sell. (updated intraday)