Monday, March 3, 2014

Looks like a negative spark today from the Ukrainian geopolitical situation. Russia controls the Ukraine in many ways; Economically, Russia provides natural gas to Ukraine at a discount and this became a sticking point a few years back, which Russian influence eventually landed the former President of Ukraine, Yulia Tymoshenko, in prison. So far everything is political theater and hopefully everything should pass without a major incident. But if the game evolves, a major ‘uh-oh’ begins when Putin stops taking calls.

The technical lines are drawn and if the SPX closes below 1844.01, that will solidly punctuate all timeframes, up to the daily, bearish. The weekly (intermediate/long term) charts are omitted this week as SPX 1797.02 still holds as the level the SPX must hold to keep the outlook from turning bearish. The long term monthly charts are updated below. 



Switch to bearish if one of the following occurs: SPX closes below 1844.01 in first hour of trading or SPX closes below 1849.42 mid-day or SPX closes below 1854.13 end-of-day.

ImageImageThe 2 hour SPX chart closed Friday one bar short of recording a TD Combo Sell @13 and the 4 hour SPX chart closed Friday one bar short of recording a TD Sell Countdown @13. Given the geopolitical developments may not go away anytime soon, there is a strong hint the counts may not finish. Note the TDST Support level on the charts below was raised to 1844.01 as new TD Setups were recorded on the shorter timeframes. 



Flip to bearish if SPX closes below 1845.12. 

ImageFurther confirmation of an emerging bearish trend would be for the SPX to turn and close below 1845.12.



Flip to bearish if SPX weekly closes below 1797.02 (updated February 24th). 



Flip to neutral if SPX closes below 1805.81 on the last day of March. 

ImageImageImageImageThe SPX still has an active TD Sell Setup, currently working on bar 20. There is no rule that TD Setups have to end at the 9th bar as there are times liquidity is abundant enough to keep the momentum going for a seemingly indefinite amount of time. Tom DeMark wrote that the 9th bar is just the common area where markets pause and reflect before a reversal or a continuation to TD Countdown mode. 

If SPX should hold above 1850.84 this month, this will record bar 8 for TD Sell Countdown. Depending how markets develop, this will have meaning in the future as any qualifying TD Sell Countdown bar 13 needs to be at least equal to bar 8 to qualify. This is a good tidbit to hold on to. 



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