Monday, March 28, 2016

 

With the Federal Reserve Board more optimistic on the US outlook, they are inclined to raise rates again sooner than later. If the upcoming Friday’s job report produces solid numbers, this may ring true, and as a result, the US Dollar Index (DXY) should be trading accordingly higher with rates. However, looking at the daily US Dollar index (DXY) below, the trend direction is lower as the daily TD Buy Countdown is currently active @3. However, TD Sell Setup @2 is also active, and if TD Sell Setup records a “9”, that will disqualify TD Buy Countdown. This will gain traction if the upcoming job’s number this Friday produces a solid number. Everything boils down to Friday. Longer term, the bias is to trend higher or chop around. If the monthly DXY closes under 94.811 on a monthly basis and the weekly 10 Year Treasury Index (TNX) closes below 16.14, that will indicate deteriorating financial conditions, and the Fed is in danger of being on the wrong side.Screen Shot 2016-03-27 at 4.52.20 PM Screen Shot 2016-03-27 at 5.39.26 PMScreen Shot 2016-03-27 at 5.48.12 PM

As global markets are stabilizing, it has coincided with a rally in the US equity markets. However, the short term S&P 500 (SPX) TD indicators have signaled upside price exhaustion last week, and equities subsequently sold off. As long as the SPX holds the 2010.04 TDST Support on the four hour chart, the bullish forces are still present. If the SPX sells off below the 2000 level at the close of the week, this will increase the probability that the SPX will trade in a smaller scale sideways trend – possibly into a triangle type pattern.


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

Neutral until further notice. 

Screen Shot 2016-03-26 at 10.26.10 AMTwo of three price exhaustion signals came as TD Sell Setup @9 and TD Combo Sell @13 came together in back to back bars, as notated by the down blue arrows. Until the 2010.04 TDST Support Level gets taken out, a bearish outlook won’t be considered.


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

Neutral until further notice.

Screen Shot 2016-03-26 at 10.25.50 AMThere is additional room for more upside before full price exhaustion occurs. However, the 2078.36 TDST Resistance is just about 2% away from the current close. Therefore, any upside potential doesn’t warrant a favorable risk/reward long trade.


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

Neutral until further notice.

Screen Shot 2016-03-26 at 10.25.28 AMA close below SPX 2000 (technically 1999.99) this Friday, April 1, 2016, will produce a reverse price flip. While some consideration will be given for bearish outlook, the combination of strong breadth and high price retracement off the 1810.10 lows will likely produce more choppy price action if 2000 gets taken out.


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

Bullish if monthly SPX closes above 2107.39 or Bearish if monthly SPX closes below 1850.61, the weekly TDST Support level on Thursday, March 31, 2016. 


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2 Responses to Monday, March 28, 2016

  1. Gary says:

    Art, just an idea but does the VIX lend itself to DeMark analysis?

    • Art says:

      It’s possible to apply TD Sequential, but it’s not terribly reliable since the VIX acts more like an oscillator than a standard stock chart. But just for informational purposes, the daily VIX recorded 13’s last week and the weekly VIX recorded a TD Buy Setup @9 last week.

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