Despite the equity markets seemingly making milestones almost daily, the non-stop rally is not quite in the melt-up stage just yet. The chart above shows all three indices — S&P 500 (SPX), Nasdaq (COMPQ), Russell 2000 (RUT) — and their price percentages above or below their 50 day moving average. In a natural state of equilibrium, these indices move in tandem. Around mid-April two months ago, red flags were popping up as the RUT and the Nasdaq were selling off and diverging in a big way with the SPX moving sideways. This unusual condition is now fixed as both the Nasdaq and the RUT are moving higher along with the SPX. For now, the markets are overbought and at a point where they should start consolidating. But if the market run-up continues unabated, and all three indices surpass the 1.05% level, this will indicate a true melt-up is in the works.
S&P 500 (SPX) SHORT TERM OUTLOOK: BULLISH
Switch to neutral if SPX closes below 1949.05.
S&P 500 (SPX) SHORT/INTERMEDIATE TERM OUTLOOK: BULLISH
Change to neutral if SPX closes below 1927.88.
No TD Sell Setup break in all major indices. The Russell 2000 (RUT) is playing catch-up. Projecting ahead of time, the next level of price exhaustion confluence on the daily charts can come next week, as TD Sell Countdown on the SPX and TD Sell Setup on the RUT can possibly converge.
S&P 500 (SPX) INTERMEDIATE/LONG TERM OUTLOOK: BULLISH
Change to neutral if SPX closes below 1877.86 on Friday, June 13, 2014 (updated June 9, 2014).
S&P 500 (SPX) LONG TERM OUTLOOK: BULLISH
Switch to neutral if SPX closes below 1859.45 on June 30th (updated June 2nd).