The S&P 500 (SPX) construct may be serving its purpose. It is built on multiple timeframe confluence and the daily SPX are spilling over to the weekly and monthly timeframes as a result. A combination of an overstretched optimistic market, and various global growth downgrades indicates the beginning of an adjustment period – prices setting up a long term trading range, which can take months to unfold. Until the adjustment period plays out, there should be opportunities both long and short going forward.
S&P 500 (SPX) SHORT TERM OUTLOOK: BEARISH
Back to neutral if SPX breaches 1955.93 intraday or closes above 1928.41.
Due to volatility, two timeframes are displayed. The 2 hour SPX is suggesting another bounce is due as the first ’13’ has been recorded through TD Sell Countdown. Additional losses on Monday should produce a ‘9’ for TD Buy Setup and possibly ’13’ for TD Combo Buy. Looking at the 4 hour SPX chart, the volatility whipsaws are so great that TD Buy Setups have not been recorded despite a clear downtrend. However, the TDST level at 1916.41 has been breached suggesting that even if there is a bounce, the lows will at be retested once it has been established.
S&P 500 (SPX) SHORT/INTERMEDIATE TERM OUTLOOK: BEARISH
Change to neutral if SPX closes above 1935.10.
S&P 500 (SPX) INTERMEDIATE/LONG TERM OUTLOOK: BEARISH
Unless SPX can close above 2010.40, staying bearish.
S&P 500 (SPX) LONG TERM OUTLOOK: BULLISH
Neutral if SPX closes below 1960.23 on October 31, 2014.