Tuesday, March 18, 2014

ImageImageWith gold on a tear, there might be some temptation to move into silver as a catch-up trade. At present, the gold/silver ratio suggests gold is the primary driver and the attached gold/silver etf comparison chart highlights the underperformance of silver (blue line). From the other attached chart, using a DeMark perspective, the individual charts of gold (GLD etf) and silver (SLV etf) are showing bullish price flips on the same day, February 5th. Note the price divergence when both GLD and SLV recorded the 9th bar. GLD continues towards TD Sell Countdown, while SLV tops out at TD Sell Setup @9, clearly showing GLD as the leader. More on gold at the bottom of the post. 

The FOMC begins their 2 day meeting today with Janet Yellen’s first press conference. Understanding they are the main influence for market direction, early clues for equity positioning can be taken today, followed by the main volatility event tomorrow. 

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

Switch back to bearish with a close below 1840.81

ImageFrom the previous high (1883.57) to the previous low (1737.92), one useful tool to determine if the rally that started yesterday can translate into new highs and beyond can be determined through TD Propulsion. Since the selloff met the minimum retracement of 23.6% from the high, a threshold level can be drawn from the anchor (1839.57) to determine the maximum amount the SPX can rally and keep the overall bearish tones. The TD Propulsion threshold level is at 1873.94, which is confluent with the 78.6% Fibonacci retracement at 1874.15. Trading above these levels allow for even higher prices.  

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

Flip to back to neutral with a close above 1868.20.

ImageImageImageImageAside from the Russell 2000, all major indices are officially on TD Buy Setups. 

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

Flip to bearish if SPX weekly closes below 1836.25 (updated March 17th).

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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). 

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GOLD ETF UPDATE: SPDR GOLD ETF (GLD)

The intermediate trend for gold is positive. 

ImageImageImageContinuing from the daily, weekly, monthly DeMark clusters that played out last December, GLD still has more upside, but the daily chart can get wobbly for the near term. Using timeframe continuity, the daily GLD chart could start experiencing a pullback with a pair of 13’s working with each other. However, the weekly chart still has an unbroken TD Sell Setup with TD Sell Countdown on bar 4. This indicates an uptrend is still in place. Adding to the continuity, the monthly GLD looks to officially record a bullish price flip this month. GLD still looks constructive for further upside. 

 

 

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