Friday, April 11, 2014

Yesterday’s “land grab” below S&P 500 (SPX) 1840 was a surprise. There were no efforts to buy the market nor any efforts to defend the 1840 support. The break under SPX 1840 is the first major indication to gauge the overall complexion of the market. If the SPX closes under 1841.13 today, the weekly chart will keep the TD Buy Setup alive at bar “3”, and if the SPX has trouble recapturing 1840 throughout the remainder of the month, the SPX monthly chart will record the first price flip since May of 2012.ImageThe above charts are representations of the major indices for the futures markets. Most of the time they correlate closely with their related cash markets. However, the interest here is the raw timing of reversal points strictly on the daily charts. The S&P 500 e-mini futures has shown true accuracy when projecting the reversal points. The TD Sell Countdown @13 and TD Combo Sell @13 were nearly perfect in capturing the initial high and the following marginal high. The Nasdaq e-mini futures decided to run-up into a blowoff top shortly after recording a TD Combo Sell @13. The Russell 2000 futures did not respond as well; though the top was a TD Combo Sell @12, one count short of a “13”. This is an illustration of one timeframe. Adding others and observing confluence of other indicators will be highly beneficial in determining the probability of a potential reversal.

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

Flip back to neutral if SPX closes above 1845.04, the daily price flip. 

ImageIt’s a clean break below the short duration TDST levels. Barring a surprise similar to yesterday, the TD Buy Setup should follow through with a qualified “9”. How it aligns with other timeframes and indicators will help identify a potential bounce. These will be explored next week. 

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

Neutral if SPX closes above 1845.04.

ImageNow that the SPX has broken a widely watched key support, the next three days leading up to a “9” will help extrapolate the longer term charts. 

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

Flip to neutral if SPX closes above 1841.13 at the close of April 11th (updated April 7th).

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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 (updated April 2nd).

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