Wednesday, December 18, 2013

The markets are evenly set up for the FOMC decision today. The bullish outcome for the bulls is zero taper with zero forward guidance. This should guide the markets higher but a case can be made for an opposite move. Therefore, any rally will be taken with a suspicious eye. The best possible outcome for the bears and the least probable is an aggressive taper greater than $15 billion dollars. Whatever the market response, the SPX trigger levels are noted below. 

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

Bearish with a close below SPX 1775.50 and bullish above SPX 1789.83.Image

Even though a close below SPX 1786.39 is a bearish price flip on the 4 hour chart, the SPX needs to close below 1775.50 (active TD Buy Setup on daily SPX) to give confidence the bear trend is still intact. It would be contradictory to have to flip bearish short term and flip neutral on the daily so the conservative option is to be neutral between SPX 1775.50 and 1786.39. The 15 minute and 30 minute charts share the same TDST Resistance level at 1789.83 and that will be the conservative option for the bullish trigger. 

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

Flip to neutral with a close above SPX 1775.50.ImageImageImageImage

Indices are mixed. SPX and the QQQ are barely in a downward momentum trend, and the Dow and the RUT are in TD Sell Setups. From a DeMark TD Sequential perspective, the most bearish outcome would be for a SPX close below 1775.50, QQQ close below 84.96, RUT close below 1103.27, and Dow close below 15,739.43. This will help insure a bearish momentum trend is continuing or getting started. 

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

A bullish price flip will occur with a weekly close above SPX 1804.76. However, that is more indicative of a wobbly market than a bullish one. (updated December 16th)

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

Will flip back to neutral with a monthly close under the January price flip level of SPX 1681.55. (updated December 1st)

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