Tuesday, April 29, 2014

ImageLots of intraday volatility lately. It’s the big shakeout, creating complacency and fear at the same time. To illustrate this – note the chart above where it shows the spread between the Nasdaq 100 Volatility Index (VXN) and the CBOE S&P 500 Market Volatility Index (VIX). Typically the spread between the VXN and the VIX is contained between 0-2 points. Having the VXN-VIX spread get as high as 6 is unusual, as it indicates the S&P 500 not caring what is going with the selloff in the Nasdaq. If this does not resolve itself soon, the complacency in the SPX will be problematic if there is a negative catalyst. 


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

Switch back to neutral if SPX cannot close below 1865.83 mid-day or below 1863.58 end-of-day.

ImageIt’s becoming increasingly likely the short term will take a neutral stance once again, setting up a showdown with the Fed release tomorrow and the jobs report this Friday. 


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

Neutral if SPX closes above 1875.39.

ImageImageImageImageAll SPX “13” counts from TD Sell Countdown and TD Combo Sell have been accounted for since April. If the next move is higher, the whole recycle process starts anew. Note the Nasdaq and the RUT holding above their respective TDST Support levels. 


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

Neutral if SPX closes above 1857.62 on Friday, May 2nd (updated April 28th).


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 below 4176.59, and Russell 2000 closes below 1163.64 (updated April 2nd).


 

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