A look at a couple of momentum stocks – Netflix (NFLX) and GoPro (GPRO). Both just established TD Buy Setups and both are still trading above their respective TDST Support levels. From a relative basis, the damage to these stocks have been minimal. But if they sell under their TDST levels in the next couple days, this will signal further selling as the TD Buy Setup counts are still in play. A reverse price flip prior to TD Buy Setup ‘9’ will cast doubt on the selling momentum.
S&P 500 (SPX) SHORT TERM OUTLOOK: BEARISH
Swing to neutral is SPX closes above 1906.55 on Tuesday’s close.
The short term structure is now aligned for a bounce. While the 2 hour SPX recorded a ‘perfected ‘9’ TD Buy Setup today, continuous selling on Tuesday can record the final ’13’ for TD Combo Buy at the close. Mesh this with the 4 hour SPX, which can ‘perfect’ a ‘8’ count TD Buy Setup, also at the close. If this outcome becomes true, an oversold bounce can commence on Wednesday.
S&P 500 (SPX) SHORT/INTERMEDIATE TERM OUTLOOK: BEARISH
Neutral if SPX closes above 1928.21, Wednesday’s bullish price flip.
A view of al the major indices, there is nothing in the TD counts that suggest a more meaningful bounce is coming. While the short term is suggesting a possible rally on Wednesday, selling that rally remains the theme.
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.