Bubble talk is escalating. It is not unusual to hear it from the likes of Marc Faber but it is unusual when it is coming from Nobel Prize winner Robert Shiller, who is also warning about a speculative bubble in an interview with Der Spiegel. It is imperative to discern the difference between an over-extended market selloff to a bubble burst selloff. As Faber mentioned, there still could be 20% more upside. In accordance to the current charts, a short term reversal looks imminent but the longer term just needs a “reset”.
S&P 500 (SPX) SHORT TERM OUTLOOK: NEUTRAL
Two late day selloffs in a row but the SPX remains above the 1800 TDST Support levels. If the SPX should close below 1802.48, both the 4 hour and the daily charts will record bearish price flips and more losses will be expected. A close under the TDST levels at 1800 will further confirm the bearish outlook.
S&P 500 (SPX) SHORT/INTERMEDIATE TERM OUTLOOK: BULLISH
When there is a TD Sell Setup @9 or a TD Sell Countdown @13, there is an assumption of some kind of price hiccup so price action should be scrutinized. So while the SPX still has not managed a TD Sell Countdown @13, it can do so today with a close above 1808.42. If a 13 can be recorded in conjunction with a SPX tag of the TD Trend Factor level near 1820, that should add to the conditions of market exhaustion.
S&P 500 (SPX) INTERMEDIATE/LONG TERM OUTLOOK: BULLISH
The DeMark counts are still in progress but momentum is slowing. The ending candle on the SPX was a small range doji. Expect more indecision for the week.
S&P 500 (SPX) LONG TERM OUTLOOK: BULLISH
Markets could use a slowdown as the monthly SPX is veering too far ahead of the 8 month and 21 month moving averages. Since there is nothing to suggest a reversal from the DeMark monthly counts, the daily and weekly charts will serve as the early warning signs. If there is a selloff, it will be a victory for the bulls if SPX 1681.55 can be defended in the coming months.