Monday, September 14, 2015

This is the week where the Federal Reserve will decide on the first rate hike in almost a decade. Whatever the decision may be, it should create additional volatility throughout all financial markets. This is a big big event and the outcome is anything but certain. The World Bank’s chief economist says a rate rise will create further turmoil, while some emerging market central banks are arguing for a rate rise to end the uncertainty. No matter what the Fed decides to do, a short-lived rally in the SPX does exist. But the probability of lower prices is the likelier outcome. Using longer term monthly charts, there is plenty of room for more instability. See below:

Screen Shot 2015-09-13 at 9.20.13 PMThe monthly CBOE 10-year Treasury Index (TNX) is in the midst of an active TD Sell Setup @5. This should continue if the Fed officially increases rates. A monthly close below 2.95% will prompt another look.

Screen Shot 2015-09-13 at 9.32.39 PMThe US Dollar Index (DXY) has completed a 9 count TD Sell Setup and it is doing what it is supposed to do by holding for the next catalyst. Judging by the non-existent retracement and the active TD Sell Countdown, this is poised to go higher.

Screen Shot 2015-09-13 at 9.34.58 PMThe impact of the US Dollar has affected EM’s with a break down on the Bollinger/Keltner volatility squeeze. Since the TD Buy Setup is on the 4 count, there is room to go lower. Keep an eye on the 19.86 TDST Support level. That could be the level where the low may be marked.


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

Neutral until the Fed decision on Wednesday, September 16, 2015.

Screen Shot 2015-09-13 at 9.38.36 PMThere is no trend at the moment, giving no reason to front run the market.


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

Neutral until the Fed decision on Wednesday, September 16, 2015.

Screen Shot 2015-09-13 at 9.39.04 PMThe outlook is the same as the Short Term Outlook.


S&P 500 (SPX) INTERMEDIATE/LONG TERM OUTLOOK: BEARISH

Neutral if SPX closes above 1970.89 on Friday, September 18, 2015.

Screen Shot 2015-09-13 at 9.39.44 PMIf the TDST Support at 1850.61 is toyed with this week, look for additional selling using the active TD Buy Setup as a guide.


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

Bullish if SPX closes above 2107.39 or bearish if SPX closes below 1972.18 on Wednesday, September 30, 2015.


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