The seeds for a broader decline in the equity markets are still present as risk aversion among emerging markets probably won’t go away overnight. Wednesday will be pivotal as the 4 hour chart can record a TD Buy Setup @9 just when the FOMC makes another tapering announcement. Today Apple reports earnings and currently it is nested between TDST support/resistance levels.
Note the changes to the sidebar format to the right. An abbreviated TD Sequential/Combo table listing several indices, sectors, stocks counts should be helpful in aggregating the bigger picture. The list will be subject to modifications so requests will be welcomed.
S&P 500 (SPX) SHORT TERM OUTLOOK: BEARISH
Trading under SPX 1803.74, the 15 minute TDST Resistance, will keep the impulsive selloff intact. Above 1803.73, SPX should find some respite.
Both the 4 hour and the daily SPX share the same TDST Support at 1767.99 making this a formidable support level. Completing a TD Buy Setup @9 on the 4 hour timeframe above this level will give rise to a potential right shoulder of a Head and Shoulders pattern, furthering the bull/bear debate. However, with the TTM_Squeeze turning south on the daily SPX, 1767.99 may just be a temporary stop.
S&P 500 (SPX) SHORT/INTERMEDIATE TERM OUTLOOK: BEARISH
Back to neutral if SPX closes above 1848.38. (updated last Friday, January 24th)
S&P 500 (SPX) INTERMEDIATE/LONG TERM OUTLOOK: BEARISH
Neutral if SPX weekly closes above 1842.27, most recent high close.
The major indices were given a chance to succeed last week if the S&P could speed past 1850, but rejection came with some bearish engulfing candles and all indices have flipped bearish, something they have not seen in awhile. From a bigger picture point of view, it seems premature to call for a bearish outlook as the upward SPX trendline is still intact. True, but trends do end and DeMark’s indicators are indicating a potential shift from positive to negative.
S&P 500 (SPX) LONG TERM OUTLOOK: BULLISH
Switch to neutral with a January close below SPX 1681.55. After January, stop levels will be raised in accordance to price flip levels. (updated January 2nd)