Monday, November 2, 2015

The relationship between Bollinger Bands and Keltner Channels has been documented here before. In general terms, for trending markets, Bollinger Bands will always be placed wider than the Keltner Channels. However, when the Bollinger Bands contract enough where the Keltner becomes the wider band, then we can officially say the market is trendless and coiling for the next move. When this occurs on the monthly S&P 500 (SPX), the resulting moves are especially pronounced as shown by the vertical time lines on the monthly SPX chart below. A visual type representation is noted in the study box below the chart labeled TTM_Squeeze. The vertical bars represent momentum histogram type bars and the horizontal dots are the Bollinger/Keltner representation. Observe that the ‘red’ horizontal dots precede major market moves. We are at that point again. The Bollinger Band has narrowed to the point where the Keltner Channel is wider or simply the ‘red’ dot has shown up. This signals the market is winding up for another big move. Screen Shot 2015-10-30 at 9.53.54 PM


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

Bearish if SPX closes below 2065.89, same as Short/Intermediate Outlook.

Screen Shot 2015-11-01 at 8.16.40 PMDespite a modest retracement after the recorded 13’s, caution is still warranted in context of the daily SPX timeframe. See Short/Intermediate Term Outlook.


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

Switch to bearish if SPX closes below 2065.89.

Screen Shot 2015-10-30 at 8.59.53 PMA ‘perfected’ 8 or 9 count can happen Monday or Tuesday. All is needed is a higher high, and observe how much this will impact the rally.


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

Neutral until further notice. 

Screen Shot 2015-10-30 at 8.49.37 PMThings can get interesting if the current TD Sell Setup @5 reaches a 9 count just around the all time highs.


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

Neutral until further notice.

Screen Shot 2015-11-01 at 8.21.44 PMGiving the benefit of the doubt to last month’s bearish switch, the switch only lasted one bar, and it’s back to neutral again. This solidifies the notion that depending on the interpretation, it is either a ‘topping process” or a prolonged trading range before resuming the up trend.


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