Friday, May 9, 2014

ImageThe downtrend for Google (GOOG) on the daily chart is void of any TD Buy Setup, representative of what is happening to the Nasdaq (COMPQ) and the Russell 2000 (RUT). However, looking outward towards the weekly charts for Google, it is finishing up a TD Buy Setup @9 today. If GOOG can show some signs of bottoming here, this should feed into the notion that Nasdaq (COMP) and Russell 2000 (RUT) will bottom into a tradeable bounce next week or two. Also, Google is representative of many high flying stocks that have been destroyed this year, which places equity markets in an interesting place. 

ImageThe Nasdaq and especially the RUT has been recognized as weak. Since the S&P 500 (SPX) has been agonizing – trading wise, there is a scenario through the secondary indices a bottom can be found starting late next week. 

Centering on that notion, let’s assume the small cap Russell 2000 (RUT) is taking the lead in the equity markets. Yesterday, it closed under its TDST Support at 1103.98. Closing under it again, two days in a row, gives confidence the RUT will continue sliding lower now or later. Following through the weekly charts, the next two weeks for the weekly RUT will likely see bar “8” and “9”, which implies a low will be made then. 

Assuming the slide continues, line this up with the daily TD Buy Setup, which today is at bar 4, a low for a tradable rally in the RUT (and Nasdaq) can commence next Thursday or Friday. If this scenario works out, the one curious factor is how the SPX will reconcile with all this. 


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

Switch back to bearish if SPX closes below 1868.43.

ImageAll the alternating price flips and the tight trading range are coiling for a swift move, as shown by the TTM_Squeeze indicator on the 4 hour SPX chart. 


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

Flip to neutral if all the following occurs: SPX closes above 1868.43, Nasdaq closes above 4057.12, and the RUT closes above 1103.93.

ImageImageImageIf the equity markets are done wavering between bullish and bearish, then they should continue to drip lower. Nasdaq and the RUT need to close below their TDST Support levels at 4057.12 and 1103.93 to keep that prospect alive today. 


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 (updated May 5th).


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 (updated May 5th).


 

 

 

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