Wednesday, February 5, 2014

Tom DeMark had significant air time on CNBC’s Squawk Box. No doubt his 1929 analog is making for good sensationalistic TV. Dissecting his prognostication for the remainder of the week, if there is a down close today and tomorrow opens lower and trades lower, Friday’s US non-farm payroll number will be perceived negative, despite a possible good print. 

 This scenario plays along with the S&P 500 4 hour short term chart and if DeMark’s path is followed, the 4 hour SPX will record a 9 on Friday, setting up a possible dip buying opportunity for a tradable bounce. As DeMark quantified, the next 2-3 days are critical, possibly in part some global markets (Nikkei, FTSE, DAX) have reached TD Buy Setups @9, and with low market confidence, a transition to TD Buy Countdown is more likely than not. Nevertheless, this week’s trajectory will be followed closely as the markets record more data points. Here is the available video on DeMark’s appearance>>>

http://video.cnbc.com/gallery/?video=3000242307

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

Switch to neutral if SPX closes above 1768. 

ImageImageAlthough bullish price flips will occur if the 4 hour SPX closes above 1754.59 mid-day or 1741.95 end of day, staying contained under 1768 will keep the bearish edge. As mentioned earlier, should TD Buy Setup continues, Friday’s job report sets up a dip buying opportunity as the 4 hour SPX will record TD Buy Setup @9. 

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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 (updated February 4th.)

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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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