Tuesday, October 22, 2013

It is a predicament to not take a more defensive outlook when many daily charts are at TD Sequential 9’s and 13’s. But with the combination of breadth expansion and the weekly charts beginning to reassert itself, the primary base case will be for more sideline money to continue buying into the markets when they see value. As mentioned previously, if there is a major reversal at hand, this week is the window. 



Will flip to neutral if SPX closes below 1750 or breaches 1744.21 intraday. Image

SPX traded past the Fibonacci targets by posting a 1759.33 intraday high but is trading accordingly presently. Rather than front-run a potential reversal as indicated by TD Sell Setup @9, I will give the bulls the benefit of the doubt that it can consolidate above the 1750 level. But there are early indications the market is starting to weigh heavy so trade management is more important at this moment. 



The markets are in the ideal reversal day today. As long as sharp selloffs are quickly bought and the market does a simple consolidation in the days ahead, the uptrend should resume in due time. ImageImageImageImage

It is all in the charts. With the SPX TD Sell Setup @9, and TD Sell Countdown @13, and the potential for a Shooting Star candle pattern, all of this is indicative of a tired market. The Dow is also sporting a Shooting Star with a TD Sell Setup @9. The QQQ’s can actually produce a bearish engulfing pattern along with a ‘perfected’ TD Sell Setup @8. 



SPX has cleared the 1711.44 closing marker for a continuation of more gains. There will be further confirmation if the SPX closes above the 1737.48 risk level established by the August 5th weekly close. (last updated October 18th)



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)



If Google can stay in consolidation around the 1000 marker on the daily and continuously close above a 1000 on a weekly close, the presumption is Google will continue its upward momentum.ImageImage

There are two forces at work on Google. The bearish force is the daily has TD Sell Countdown @12 and TD Sell Setup @8, It is at a point where it will become tougher to move higher in a meaningful way. The weekly also shows TD Sell Countdown @12 and TD Combo Sell @11 so there is timeframe confluence. Not shown is the monthly chart but it shows it is in the trending TD Sequential component with TD Sell Countdown @4. The bullish force is the Bollinger bands exiting out of the Keltner bands as shown by the horizontal dotted lines turning green on the TTM_Squeeze indicator. This should keep the momentum to the upside. The outlook for Google on an intermediate/long term basis will be bullish if it can maintain its price status at the 1000 level. This can be achieved by the daily price relieving price exhaustion by consolidating near the 1000 level. A boost will be given if it can continue to close above 1000 on a weekly basis. This scenario will allow both bullish/bearish forces to resolve simultaneously. 


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