Tomorrow is the non-farm payroll release and the most important metric for FOMC policy. While a good or a bad print can be bullish, equity markets are in the scope of a potential reversal between now and next Monday. Although breadth has been strong, the daily charts on the major indices are tracking exhaustive signs.
Still keeping score on the China default scene, corporate bonds can now be added to the list along with China’s Wealth Management Products (WMP) and peer-to-peer companies (P2P). Not expecting the “Bear Stearns moment” upheaval from China’s first potential corporate bond missed payment tomorrow, but just to be prepared, 2014.70 is the initial level of importance for the Shanghai Composite. Chaori Solar is the company in question and since their size is fairly small, the government just might let a default occur (as it should) but if there are some ripples, a break under the 2014.70 TDST Support will signal a look at the bigger picture through the weekly and monthly chart lens. ——————————————————————————————
S&P 500 (SPX) SHORT TERM OUTLOOK: NEUTRAL
In the event the market falls hard, flip to bearish with a close below 1854.29, the daily price flip (updated yesterday).
S&P 500 (SPX) SHORT/INTERMEDIATE TERM OUTLOOK: NEUTRAL
Flip to bearish if SPX closes below 1854.29.
Continuing the path of reckoning from yesterday, on the S&P 500 chart, TD Sell Setup @8 has reached the minimum for perfection. TD Combo Sell did not produce a new closing high to go along with the higher high; therefore the 10 count stays. The Dow is still the laggard, count wise. The Nasdaq moved up a notch and TD Combo Sell can set up and record a 13 with a new higher high and closing high this Friday. The same can be said for the RUT as it will conditionally record the 13th bar of TD Combo Sell tomorrow.
S&P 500 (SPX) INTERMEDIATE/LONG TERM OUTLOOK: NEUTRAL
Flip to bearish if SPX weekly closes below 1797.02 (updated February 24th).
S&P 500 (SPX) LONG TERM OUTLOOK: BULLISH
Flip to neutral if SPX closes below 1805.81 on the last day of March (updated March 3rd).
EQUITY SETUP UPDATE: BENEFIT FOCUS (BNFT)
Earnings out after the close.
BNFT is a volatile stock and works best for quick swing trades and cannot be categorized as a true momentum stock yet but the signs are there if it can hold the 57.54 TDST Support. After a series of TD Setups that defined the turning points, BNFT has been productively consolidating in a Keltner/Bollinger volatility squeeze and if the reaction to earnings is positive, another higher high cannot be too far away.