Tuesday, February 4, 2014

The S&P 500 TDST daily support is officially broken and now the down trend is obvious to all. More weakness is likely to continue, but just when the media headlines are caught up with the S&P’s worst February start since 1933, the markets are in bounce territory for the short term. All the short duration SPX timeframes support this notion as DeMark 9’s and 13’s are spread out from the 15 minute through 120 minute timeframes at the close yesterday. 

 Also note the TD Sequential/Combo table on the right. There are some correlated assets that are at price exhaustion levels. For today, the global markets – Nikkei, FTSE, and the German DAX will record or about to record TD Buy Setups @9. Also, 30 year Treasury bond futures (ZB) and the 10 year Treasury yield index, TNX (not shown) are recording TD Buy Setups. How these markets behave will dictate the US equity markets. With the VIX, the volatility index, above 20, larger than usual quick swings are the norm. 

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

In the event the SPX mounts an extraordinary comeback, neutral if SPX closes above 1768. 

ImageAs mentioned in the opening remarks, all the short duration S&P charts are at price exhaustion levels so a bounce or some stability is expected. Shown is the 120 minute SPX chart and it is reaching a triple confluence of TD Buy Setup, TD Buy Countdown, and TD Combo Buy. 

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

Flip to neutral if daily SPX closes above 1768, the support/resistance polarity level. 

ImageImageThe Dow Industrials have reached a 9 count for TD Buy Setup. Some price stability is expected here to go along with the correlated assets. Another lower close by the DJI will raise some questions: is it following the previous pattern of an extended TD Buy Setup or is it leading markets to a path towards TD Buy Countdown? 

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

Neutral if SPX weekly closes above 1842.27, most recent high close (updated January 27th.)

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

Flip to neutral if SPX (monthly) closes below 1756.54 (updated February 3rd.)

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