Thursday, November 14, 2013

As the Senate Banking Committee conducts the Q&A session to formalize Janet Yellen as the the next Fed Chief, the spectral tone from the Senate between now and when Bernanke was confirmed for his second term is remarkable. The vitriolic jabs Bernanke took that stated his policies were reckless and his failing to take proactive steps in preventing the financial crisis went full tilt. Now as Janet Yellen is speaking, the doubters are still there but the Senate’s tone is more open to follow the Fed’s lead. My belief is quantitative easing (QE) is an intellectual exercise that works in theory and that any exogenous shock to the economy will derail it. But QE did in fact survive Europe when it was coming unglued and now – QE has gained acceptance and practiced globally. It’s a new world. Meanwhile, equity markets have broken out. 



In the event there is a reversal, flip back to neutral with a close below 1770. Image

If the SPX rally can record a TD Sell Setup, that will place the next point of evaluation starting late next Monday. Also note the Keltner/Bollinger TTM_Squeeze has taken off the the upside making to likely a TD Sell Setup will be completed. 



There is a TD Trend Factor target that looks viable at SPX 1820.59.ImageImage

So far we have SPX on a TD Sell Setup @2, TD Sell Countdown @7 and TD Trend Factor at 1820.59 which is less than 2% away. If there are other indicators that support SPX 1820 as a target, then they will be added as the days go by. If 1820 is not reached and other TD Sequential or other indicators favor a selloff, then that could be a presupposition that the markets are getting weaker than previously thought. There is also a likely TD Combo Sell @13 today on the SPX daily. Given the short term Keltner/Bollinger volatility squeeze is in effect, the 13 count is ignored. Also, watch to see if the Russell 2000 (RUT) has the ability to make another higher high to support the bullish case. The RUT TD Trend Factor is at 1152.47.



SPX, Nasdaq (COMPQ), and the Russell 2000 (RUT) are all at ground zero of TD Sell Setup @9. Current expectations is the same as last week. The 9’s do not have to matter immediately since the daily counts may have found renewed strength. (updated November 11th) 



SPX has decisively closed above the May highs and current TD Sell Setup @9 + 7 remains unbroken. Will flip back to neutral with a monthly close under 1685.73. (updated November 4th)




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One Response to Thursday, November 14, 2013

  1. hatman says:

    1808 and 1828 are still the targets. It might go straight to 1828, but more likely to hit 1808 or thereabouts first, then make a surprise dip to the 1760 area before finally completing a 5th wave to 1828. After 1828 I see 1620/40 and possibly as low as 1560. Sentiment is too bullish.

    For the Bollinger Band squeeze, note that John Bollinger warns many times in his book to watch for a headfake move as the first move from a squeeze: the market headfakes in the wrong direction, then quickly reverses. That might happen if 1808 is hit.

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