Still tracking the iShares Emerging Markets ETF (EEM), the EEM has fought off the daily price exhaustion signals from mid to late May practically without any distress and currently recycling higher into fresh TD Sell Setup counts. Given the global low interest rate environment contributing to the bullish strength, and the price separation from the 41.85 TDST level off the weekly charts, the probability is high the coiled spring breakout is to the upside. as shown by the monthly EEM TTM_Squeeze indicator.
There is not much standing in the way for the market to keep melting higher. There are a few exhaustion points showing up, but momentum is particularly strong and indices have recycled higher. Expanding the timeframes, the weekly S&P 500 (SPX) has “perfected” the TD Sell Setup by recording a new high today. The monthly SPX price exhaustion window has already begun and could extend out to the end of August.
S&P 500 (SPX) SHORT TERM OUTLOOK: BULLISH
Switch to neutral if SPX closes below 1940.12.
The 4 hour SPX recorded TD Sell Countdown @13 last Friday, the second “13” in two days. Some kind of overbought pullback looks imminent.
S&P 500 (SPX) SHORT/INTERMEDIATE TERM OUTLOOK: BULLISH
Switch to neutral if SPX closes below 1924.24.
When equities start to get vertical, adding the 8 day exponential moving average, the trending MA, helps guide momentum along the way with TD Sell Setup. Just another way of having one trend indicator confirm another. Note that TD Combo Sell is just three counts shy of a “13”.
S&P 500 (SPX) INTERMEDIATE/LONG TERM OUTLOOK: BULLISH
Change to neutral if SPX closes below 1877.86 on Friday, June 13, 2014.
CURRENT: The SPX weekly TD Sell Setup is the dominant count, currently on bar “8” this week. Same for the Nasdaq. The dominant count is TD Sell Setup, currently on bar “3”. The RUT remains the wildcard. It has recorded a TD Sell Countdown @13 right at the 61.8% Fibonacci retracement level.
PROGNOSTICATION: Momentum off the volatility squeezes is still in effect and at least another week of highs is expected, the Dow and the SPX look towards perfecting their TD Sell Setups. Also keeping the RUT as a wildcard. It has recorded a viable TD Sell Countdown @13 and settled right at a the typical Fibonacci 61.8% turn point. If the RUT suddenly loses price momentum right at this area, another bear case can be built.
S&P 500 (SPX) LONG TERM OUTLOOK: BULLISH
Switch to neutral if SPX closes below 1859.45 on June 30th (updated June 2nd).