Wednesday, February 12, 2014

No changes and no preset course for anything until the next Fed meeting was all Janet Yellen had to say yesterday. Her non-commitment induced rally was a good enough to place some doubt on the 1834 S&P 500 TD Trend Factor as it could be a pause level rather than an outright reversal level. However, allow price to become the final arbiter as the SPX still needs to get past the 4 hour SPX TD Sell Setup @9 first. If this rally should continue, then there are some interesting scenarios building on the indices – notated on the daily charts below. 

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

Flip to neutral if SPX closes below 1799.66.

ImageImageThe 4 hour SPX has recorded a TD Sell Setup @9 and it would be prudent to take some longs off the table. Judging by the spirited rally, this is also the point in time to make a calculated decision and judge if the S&P wants to proceed on to recording a TD Sell Countdown, the next half of TD Sequential. Any consolidation above SPX 1810 is still super bullish. 

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

Change to neutral with a close below 1773.43.

ImageImageImageImageIn an effort to find a common denominator through the various counts on the major indices, the SPX is less than 1% from reaching the 1834.55 TD Trend Factor. To obtain confidence 1834 is a reversal point, it is always preferable to have some confluence with the available counts. The one possibility for the SPX is a potential 13 count for TD Sell Countdown in the coming days. (Reminder – one TD Sell Countdown count is a close that is higher than the high of the previous close two days earlier.)

The Nasdaq (COMPQ) is already at the designated TD Trend Factor 4188.82 but with TD Sell Setup @3,  it is difficult to make a blatant call for a halt in the rally at this juncture. Note that a qualified 13 count for TD Sell Countdown is obtainable at 4225.76, and TD Combo Sell will near a price exhaustion signal soon after a another high is achieved. The bulls have their work cut out for them.  

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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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