Monday, May 5, 2014

Mentioned in the comments section, Tom DeMark made another Bloomberg public statement for an 11% S&P 500 (SPX) correction last week. This is a far cry from the 1929 analog, which would have been akin to a nuclear detonation. Like every market call he makes, it is always conditional to have certain price objectives met first. In the case for the SPX to fall 11%, DeMark mentioned a higher close above 1891, which will mark a significant high. Although there was no close above 1891, the probability for equities to fall to DeMark’s 11% target is still elevated, given the price exhaustion signals on various timeframes. The Bloomberg piece: http://www.bloomberg.com/news/2014-05-02/tom-demark-says-u-s-stocks-at-risk-of-11-decline.html

*The Long Term Outlook has been revised due to some stale quotes I received at the end of April. The outlook is still bullish, but close to a turning point. 


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

Switch to neutral if SPX closes above 1883.36.

ImageAnother presumption the SPX will at least test the lower ranges again. 


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

Flip to bearish if SPX closes below 1878.33, Nasdaq closes below 4103.54, and the Russell 2000 closes below 1120.83.

ImageThe feeling here is the SPX will play catch-up to equity markets join in the Nasdaq and RUT weakness. 


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

Back to bearish if, on May 9th, the SPX closes below 1815.69, or if both the Nasdaq and the RUT close below 3999.73 and 1111.44, respectively.

ImageImageImageImageThe SPX is still officially coiling as dictated by the TTM_Squeeze indicator. With the SPX recording a dual “13” on TD Sell Countdown and TD Combo Sell last Friday, the bias is for the downside, joining the Nasdaq and the RUT. 


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

Flip to neutral if the SPX does not trade above 1897.28 during the month of May and closes below 1836.27 on May 30th, the 8 month MA. Alternatively, flip to neutral if SPX closes below 1782.59 on May 30th.

ImageImageImageImageThe price exhaustion signals are notable on the Dow, where it has met the minimum for a “perfected” TD Sell Setup, as the high of bar “8” is the true high, and also on the SPX, where it has recorded a TD Combo Sell @13. Note the Nasdaq and the RUT have both price flipped bearish. 

 

 

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