Monday, December 23, 2013

It’s a short week for the markets. The Christmas rally is still intact and there are still no upside price targets but there is the SPX 1807 cluster area which serves as support. Bulls need to hold this area through the end of the week and if they are successful, then the next bull test is how it responds to a possible confluence of recorded TD Sell Setups converging around the end of the week. More details in the written SPX technical outlooks.



If SPX stays in rally mode, Thursday or Friday could mark the exhaustion point. Flip to bearish if SPX closes below 1807.22. Image

If the TD Sell Setup stays intact, the 4 hour SPX chart will point to this Thursday or Friday as a possible exhaustion point. As time approaches, the shorter duration timeframes could lend support to the end of the week target. In the event there is a premature failure to hold the rally, the demarcation level is noted at the SPX 1807 area. The 15/30/60 minute timeframes all have TDST support in the 1807 area and a selloff below 1807 will be taken as a bearish trigger. 



Flip to neutral with close below SPX 1807.Image

The SPX 1820.59 TD Trend Factor is not the ideal reversal level when considering the SPX has already been consolidating for about a month under SPX 1820. At best, it could have an imperfect impact if the SPX consistently closes in or around the level. The probable scenario is staying with the Christmas rally theme. The current TD Sell Setup is on target to reach a 8 or 9 count on December 30th and 31st, respectively, which is fairly close to the 4 hour exhaustion period on the SPX. 



Switch to bearish with weekly SPX close below 1805.81ImageImageImageImage

Just as the weekly charts were setting up bearish, an upside reversal came through but to initiate new long positions needs more assessment. However, if the market decides to reassert their bearish tendencies, then a weekly close below SPX 1805.81 should be sufficient price wise. For the remaining indices, bearish price flips will occur with a weekly close on the RUT below 1142.89, DOW below 16,086.41, and the Nasdaq Composite (COMPQ) below 4059.89. 



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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One Response to Monday, December 23, 2013

  1. hatman says:

    Looks like SPX is going to try for the top of the target range 1819-1838. It should drop back to the 1810 area first, and then make a final trip to the high. The alternative view is that this is part of a rather tedious drawn out rising wedge thing that will take a more scenic route to the top of the target area.

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