Wednesday, April 30, 2014

ImagePrior to Twitter’s earnings yesterday, it had all the ingredients for a bullish reversal – a series of price exhaustion signals right above the TDST resistance at 40.40. But Twitter’s reaction to earnings placed it in a new phase of uncertainty. The bullish case is not entirely dead though, as the final TD Combo Buy at “13” will be recorded today. But unless Twitter closes with an ideal reversal candlestick bar, such as a “hanging man” candle, followed by a close above 40.40 tomorrow, Twitter will be disassociated from the long side until further notice. To counter Twitter’s rotten response, a positive Apple update is presented at the bottom of this post.

It is Fed day today. There should not be any surprises; therefore a surprise is expected. If the S&P 500 (SPX) continues to trade in the upper ranges or higher, the weekly SPX has a solid chance of recording a TD Sell Countdown “13” and TD Combo Sell (Version 1) “13”. The SPX may resolve to the upside near term, but the sustainability is questionable for the longer term. It is this reason the overall environment favors a neutral or bearish outlook.


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

Switch back to bearish if SPX closes below 1869.52.

ImageImageDespite losing the TD Buy Setup on the 4 hour chart, the collection of short duration timeframes are used to navigate the land. Shown above is the 2 hour SPX chart, which is nearing price exhaustion. The 15, 30, 60 minute SPX charts have similar patterns. 


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

Switch back to bearish if SPX closes below 1869.52, same as Short Term Outlook.

ImageImageImageThe SPX counts are held silent again. It is more helpful to see what the Nasdaq and the Russell 2000 are doing since they are holding on to their TD Buy Setups. On the contrary, they are also constructively holding above their respective TDST Support levels. Market signals are truly mixed. 


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).


EQUITY SETUP UPDATE: APPLE (AAPL)

Daily price exhaustion but intermediate long play still intact. 

ImageImageImageApple will record a daily TD Sell Setup @9 today, just under the monthly 603 TDST Resistance level. Although this may necessitate some giveback, the intermediate and longer term shows promise. From the bullish earnings catalyst last week, the weekly TTM_Squeeze is indicating a decisive breakout, further supporting momentum to the long side. Therefore, Apple has a better than average chance of eventually breaking above 603.


 

 

 

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