Thursday, October 10, 2013

Another possible stopgap deal that re-opens the government but extends the political wrangling for another six weeks is worth 20 plus S&P points today. Imagine what a grand bargain would look like. Though minuscule, at least Congress and the White House are talking. In the end, someone has to blink on the sticking points and by the time that occurs, the fallout can be measured. 

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S&P 500 (SPX) SHORT TERM OUTLOOK: NEUTRAL

Just when the chess pieces were coming together, the 4 hour TD Buy Setup will once be shut silent. Image

From the SPX top at 1739, there has not been any TD Setup to navigate with even though SPX has lost almost 5%. For those inclined, the most practical way to trade the short term is to short the 1% rips and buy the 1% dips with reference points. At this point, the current range between SPX 1683-1685 (short term TDST resistance) looks tempting to sell the rally especially in light that there is still no fiscal deal with a ‘handshake’. It’s an aggressive trade but it’s the nature of the daily risk-on, risk-off sentiment. 

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S&P 500 (SPX) SHORT/INTERMEDIATE TERM OUTLOOK: BEARISH

Switch to neutral if SPX closes above 1676 today. ImageImage

The daily TD Buy Setup officially disqualifies if the SPX closes above 1690.50 but the market would have to fall hard on back-to back days to keep the TD Buy Setup active. Given how hard the VIX has fallen, and the Dow reclaiming 15,000, SPX 1676 is more viable. 

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S&P 500 (SPX) INTERMEDIATE/LONG TERM OUTLOOK: NEUTRAL

Will officially flip to bearish if weekly logs a close below 1687.99 this week. (last updated October 7th)

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S&P 500 (SPX) LONG TERM OUTLOOK: NEUTRAL

Market is extended and within’ the risk level parameters of the 9 and 13 TD Sequential clusters in April and May. (last updated September 30th)

 

 

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