Wednesday, May 21, 2014

ImageImageImageGoing back to the beginning of the year, the iShares Emerging Markets ETF (EEM) ran into an inflection point, and it was not until late March where the assumption for a potential rally became high, as long as the EEM continued to trade above the 40.35 bull/bear polarity level. Currently the daily EEM has recorded a confluence of TD signals – TD Sell Setup and TD Sell Countdown. TD Combo Sell missed a “13” by a single penny. Expectations is the EEM to at least consolidate. With the monthly EEM chart recording a bullish price flip, and the weekly charts breaking above the weekly TDST Resistance level at 41.85, close to the daily TDST at 41.38, the bias is still to the upside for the longer term. To keep the bullish case open, having the EEM trade and consolidate above 41.38 will be enough relieve the current TD “13’s” until the next catalyst higher. Note the extreme tight range the monthly EEM is showing, gearing up for a major move via the Keltner/Bollinger volatility squeeze. China is the most probable leader in what happens next. 

ImageThe overall market theme continues for one leg up and one leg down. Note the VIX printed under 12 today, which typically marks ultra complacency and selloffs. 


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

Bearish if SPX closes below 1870.85.

ImageIt’s back to watching the market yo-yo until further notice. 


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

Back to bearish if SPX closes below 1870.85.

ImageImageIf the SPX can keep the active TD Buy Setup going through today, the Russell 2000 (RUT) index can see a potential confluent bottom next Monday or Tuesday, through a daily and weekly “9” count TD Buy Setup. 


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

Switch to bearish if weekly SPX closes below 1863.40 on May 23rd (updated May 19th).


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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