Wednesday, April 2, 2014

ImageThe commodity linkage to global growth, copper (aka Dr. Copper), is back above the bull/bear $3 level. Following the sharp drop after China’s first corporate default, copper sped under the $3 bull/bear level. But speculation that the People’s Bank of China (PBoC) may restart their deployment of cash pushed copper back above $3. Currently copper is trading on TD Sell Setup @7 and if a “9” count is recorded, a retracement will be anticipated. It is fairly crucial for copper to trade above the $3 mark to keep the global markets positive. It seems premature for the PBoC to begin accelerating capital investment infrastructure projects after all the empty housing complexes and shopping malls that exist. But then again, that has been China’s Modus Operandi: Any whiff of lagging growth, it’s time bring out the cement trucks and bulldozers again. 

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

Flip to neutral with a SPX close below 1873.99.

ImageSince there is a clean breakout above the 1882.35 TDST Resistance, TD Sell Countdown and TD Combo Sell counts have been added to the 4 hour chart. Observe that both TD Sell Setup and TD Sell Countdown can reach their respective “9” and “13” at the close of Thursday, bringing a head-to-head showdown with Friday’s non-farm payroll release. 

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

Flip to neutral with a SPX close below 1873.99, same as Short Term Outlook.

ImageThe Keltner/Bollinger (K/B) volatility squeeze in still in-play (now favoring the upside), but the rally could be short-lived as it has to reconcile with a possible TD Sell Countdown @13 this Friday, adding to the confluence on the 4 hour chart. Combine that with the weekly “13’s”, and this sets up a pretty convincing argument of a reversal beginning early next week. 

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

Switch back to neutral if SPX closes above 1878.04. That will also record a TD Sell Countdown@13 (updated March 31st).

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S&P 500 (SPX) LONG TERM OUTLOOK: BULLISH

Switch to neutral if all of the following occurs: SPX closes below 1848.36, Dow closes below 16457.66, Nasdaq closes 3771.48, and Russell 2000 closes below 1163.64.

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