Looking at biotechnology with the monthly chart of the iShares Nasdaq Biotechnology Index ETF (IBB), which is correcting after a multi year run, the interpretation is straightforward: If the IBB can continue the downward momentum, and slice under the 242.36 TDST Support, this will reinforce the downtrend and see much lower prices. On the flip side, if IBB can continue to close above 242.36 in the next few months, a reversal could be in the works.
For the S&P 500 (SPX), both bulls and bears should continue to be frustrated as the SPX stays non-committed. The current environment calls for a counter trend higher. Bears will have their way if the SPX sells through 1850.61.
S&P 500 (SPX) SHORT TERM OUTLOOK: BULLISH
Neutral if SPX closes below 1903.63, same as daily bearish price flip.
S&P 500 (SPX) SHORT/INTERMEDIATE TERM OUTLOOK: BULLISH
Neutral if SPX closes below 1903.63 at close of day.
S&P 500 (SPX) INTERMEDIATE/LONG TERM OUTLOOK: BEARISH
Neutral if SPX closes above 1922.03 on Friday, February 5, 2016.
A completed “9” count TD Buy Setup above the 1850.61 TDST Support level paints a far less bearish picture. Expectations are for the SPX to make a counter move higher, which can start if the weekly SPX can close out at 1922.03 or higher.
S&P 500 (SPX) LONG TERM OUTLOOK: NEUTRAL
Bearish if SPX closes below 1850.61, the weekly TDST Support level on Monday, February 29, 2016.
The monthly SPX chart: Is it a topping process or is it just relieving the excess bullishness before going higher. We will stick with the latter, but this time we are open to the bearish end if 1850.61 is demolished to the downside. Note the TTM_Squeeze is still coiling, and the 8 month MA is intersecting the 21 month MA.