The better than expected retail sales and initial jobless claims are supporting equity markets for the near term. Overall, a bearish stance is taken until the SPX index gets past the indicated levels.
Despite the Fed’s commitment to taper on a monthly basis, the US Dollar as represented by the DXY currency basket, is sitting range bound. There are many inputs to the dollar basket, but the technical picture shows the next point of change is near, according to the DXY daily chart above. Currently, it’s on the second TD Buy Setup and the 9th bar has been ‘perfected’. Ideally, to support the potential reversal, TD Buy Setup should stay above the 79.154 TDST Support or emphasis shifts to the unfinished counts on TD Buy Countdown/Combo Buy.
S&P 500 (SPX) SHORT TERM OUTLOOK: BEARISH
Flip to neutral if SPX closes above 1872.81 mid-day or 1863.88 end-of-day.
Despite the active TD Buy Setup on the 4 hour timeframe, trading has been listless, and even if the TD Buy Setup follows through to a 9 count, getting past the S&P 500 short duration cluster support will take a strong catalyst to pound through there.
S&P 500 (SPX) SHORT/INTERMEDIATE TERM OUTLOOK: BEARISH
Flip to back to neutral with a close above 1878.04.
The sluggish trading is showing through the daily charts as well. The SPX closed yesterday with a hanging man candlestick bar, which indicates the bulls are trying to take over. But as long as TD Buy Setup stays active, it is assumed equity direction is to the downside. The price flip level (4336.22) for the Nasdaq is very close and failure to close above the price flip level maintains the status quo for all indices.
S&P 500 (SPX) INTERMEDIATE/LONG TERM OUTLOOK: NEUTRAL
Flip to bearish if SPX weekly closes below 1838.63 (updated March 10th).
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).