Wednesday, April 16, 2014

ImageThe overnight official GDP for China printed 7.4% for the year. Depending on who you ask, the numbers are completely distorted, and the print should be closer to 5.7% when annualized from quarterly numbers. While it is a conundrum for China to prevent a hard landing, the weekly Shanghai Composite Index (SSEC) is just a stimulus package away from a breakout if the People’s Bank of China (PBoC) acts. 

Retail sales for China ticked higher to 12.2% from the previous year. Many mid-level shopping malls do have good foot traffic, but the high-end malls are a problem. Citing the IFC mall in Shanghai, it sports the usual high-end stores, but the only visible pedestrians inside are the security guards. Retail workers stand idly with long faces, and the only activity is in the City Super, a grocery store where expats can get familiar food products at ridiculous prices. 

A decent up opening for the US indices. Watching the Nasdaq and the Russell 2000 in particular. They both stand a good chance to finish a full “perfected” TD Buy Setup and may prove to be a better barometer than the S&P 500 (SPX) going forward. Alternating pockets of strength and weakness equates to a sideways market. 


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

Neutral until further notice. 

ImageEven if the 4 hour SPX flips bearish, there is probably no value in shorting since the daily timeframes are at price exhaustion levels. 


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

Flip to neutral if the SPX cannot close below 1833.08, and if both the Nasdaq and Russell 2000 close above 4054.11 and 1127.66, respectively.  

ImageImageImageEquity markets are forming at least a temporary bottom. This is evident in the Nasdaq and the RUT, where both indices exhibit “perfected” TD Buy Setups. There is some indecision on future direction since the Nasdaq is trading under the TDST Support at 4057.12 and the RUT is trading above it at 1103.93. 


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

Flip to neutral if SPX closes above 1866.52 (updated April 14th).


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).


EQUITY UPDATE: TWITTER (TWTR)

ImageTwitter finally broke out of the downtrend just above the TDST Support level at 40.40 with a convincing bullish price flip. It did so with a multitude of over-lapping counts, but the recent “perfected” TD Buy Setup may have been it. The next minor hurdle stems from the 47.44 TD Resistance, and with Twitter’s initiation bullish candle, it should not have any problems breaking it. From a fundamental view, Twitter continues to commit to growth with acquisitions to boost revenue, and key shareholders are refraining from selling their lock-up shares, all supportive to TWTR.


 

 

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