The continuing chain from bad weather to economic data weakness to US dollar weakness to equities rallying suggests less Fed tapering of asset purchases going forward. The persistent bad weather may not been a factor for the Fed and with today’s FOMC minutes release, we’ll get a glimpse if weather may hold a future role in the QE unwind. The TD Sequential/Combo table on the right shows plenty of markets at the 9 and 13 junctures, including the US dollar. An illustrative look at two of them (DXY, EEM) is at the bottom of today’s post.
S&P 500 (SPX) SHORT TERM OUTLOOK: BULLISH
Switch to neutral if SPX closes below 1835.03 mid-day or below 1838.51 end-of-day.
The 2 hour SPX chart has maxed out of DeMark exhaustion signals and a bearish price flip is pending. The 4 hour SPX is still the primary timeframe and a close below 1835.03 mid-day or a close below 1838.51 end-of-day, will record the first price flip since the rally started February 5th – incredible.
S&P 500 (SPX) SHORT/INTERMEDIATE TERM OUTLOOK: NEUTRAL
Switch to bearish with a close below 1819.26.
S&P 500 (SPX) INTERMEDIATE/LONG TERM OUTLOOK: BEARISH
Switch to neutral if SPX weekly cannot record a close below 1790.29 (updated February 17th)
S&P 500 (SPX) LONG TERM OUTLOOK: BULLISH
Flip to neutral if SPX (monthly) closes below 1756.54 (updated February 3rd.)
INDEX UPDATE: iShares Emerging Markets (EEM) & US Dollar Index (DXY)
Emerging markets and US Dollar at inflection points.
The EEM designated resistance level at 40.35 is serving as a proxy for a TDST Resistance level and currently a TD Sell Setup is about to be recorded. Since the TD Sell Setup is unperfected, bar 9 of the Setup needs to at least equal bar 7’s high print at 39.87. Unless EEM can work above 40.35, it is likely to see EEM retrace the rally that started in early February.
For DXY, TD Buy Setup is complete and if the currencies affecting the dollar basket reassert themselves by sending DXY higher, the turning point is right about now with TD Buy Setup @9.