Thursday, June 12, 2014

ImageIn the spirit of the Copa Do Mundo, the iShares Brazil ETF (EWZ) will be covered for the big day. There are plenty of headwinds out of Brazil. In addition to over $10 billion spent to host the World Cup, inflation, rate hikes, and dependence on China has the weekly EWZ trading with lower lows since mid 2011. But success in the World Cup can bring a nice rally in the EWZ as the weekly charts suggest. On May 16, 2014, EWZ recorded a TD Sell Setup @9 under the TDST Resistance level at 50.29, creating a bearish picture. But the weak bearish response is about to turn bullish. This week or the next, if EWZ can close back above 50.29, the markets will be betting Brazil can turn things around economically, and TD Sell Setup and TD Sell Countdown will be active accordingly. Having Brazil breakout to the upside will also help support the emerging market bullish thesis on the EEM ETF.

Equity markets are finally being challenged. The details are below.


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

Flip back to bullish if SPX closes above 1950.73.

ImageMomentum has been officially halted. The primary case is for the 4 hour SPX will pullback modestly and regain the uptrend or hold until next week’s Fed meeting.


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

Change to neutral if all of the following occurs: SPX close below 1949.44. Nasdaq close below 4321.40, Russell 2000 close below 1165.21.

ImageImageImageTaking a collective stance for the SPX. If the SPX conducts a reverse price flip today by closing under 1949.44, it doesn’t signal an immediate change to “neutral” by itself. If the Nasdaq and the Russell 2000 (RUT) maintains their bullish stance, the SPX will likely follow.


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). 


 

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