The Market Vectors Semiconductor ETF (SMH) can serve as an alternative indication of what the major market indices may do next. Since SMH recorded the final ’13” on June 19, 2014, it price flipped bearish in the next days, breaking the 24 consecutive TD Sell Setup counts held since May 19, 2014. Currently, TD Buy Setup is at bar “3” and a bullish recycle will need consideration if SMH closes above 49.36 today or tomorrow. If successful, this will bode well for the continued melt-up in the major indices.
MARKET UPDATE – Still looking at TD Sell Countdown on all indices to make a series of “13’s” across the cash and futures markets. They have a wide range to maneuver today to prove it still has a bit more upside. However, the opening trades this morning are printing lower lows from yesterday’s session which is challenging that notion. If the S&P 500 (SPX) begins a process of alternating daily price flips, bullish options will wane.
S&P 500 (SPX) SHORT TERM OUTLOOK: BULLISH
Back to neutral if 4 hour SPX closes below 1950.17.
S&P 500 (SPX) SHORT/INTERMEDIATE TERM OUTLOOK: BULLISH
Same as Short Term Outlook; Back to neutral if 4 hour SPX closes below 1950.17.
There is a good chance the SPX will reverse price flip again, but the interpretation may just be the markets need more time to reset, and not necessarily bearish, unless the SPX tanks lower than 1950.17 at the close.
S&P 500 (SPX) INTERMEDIATE/LONG TERM OUTLOOK: BULLISH
Switch to neutral if SPX closes below 1923.57 (updated June 23, 2014).
S&P 500 (SPX) LONG TERM OUTLOOK: BULLISH
Switch to neutral if SPX closes below 1859.45 on June 30th (updated June 2nd).