Monday, April 11, 2016

Brazilian equities have gained some momentum in recent weeks, and TD indicators point to a bottoming process. The backstory is while Brazil is locked into a recessionary crisis, the political turmoil surrounding the possible impeachment of their current president may provide some political will to end the recession. That possibility is providing some support for Brazil’s Bovespa index which has fallen about 40% from the highs made in 2014. From the iShares MSCI Brazil ETF (EWZ) shown below, all indications point to further gains. The monthly chart recorded its first bullish price flip since September of 2014. This is the primary trend to watch – to see if TD Sell Setup can stay active. The weekly chart broke above the 24.18 TDST resistance. This is significant since it indicates a likelihood TD Sell Setup will lateral to TD Sell Countdown, the trending component of TD Sequential. However, the daily EWZ is nearing their price exhaustion “13’s”. While there is a decent chance it may just recycle higher, any volatility from the economic front and/or the political situation will be considered buying opportunities. Screen Shot 2016-04-08 at 10.27.24 PMScreen Shot 2016-04-08 at 10.27.41 PMScreen Shot 2016-04-08 at 9.47.36 PM

For the S&P 500 (SPX), there are market moving news items this week starting with economic releases from China, and the beginning of earnings season.


Bearish if SPX closes below 2028.31 mid-session. Back to neutral if the end of day close returns back above 2028.31.

Screen Shot 2016-04-08 at 9.23.13 PMWith TD Buy Setup @4, a bearish view can be taken if a “5” count is recorded below the TDST Resistance at 2028.31. if the bear view turns out to be false, a good indication would be if the subsequent bar trades and closes above 2028.31.


Bearish if SPX closes below 2028.31.

Screen Shot 2016-04-08 at 8.58.21 PMAlthough volatility crept higher, the SPX stayed in a relatively tight trading range. Very similar to last week’s outlook, caution is warranted due to a multitude of overhead resistance levels, and TD Sell Countdown nearing completion.


Neutral until further notice.

Screen Shot 2016-04-08 at 8.43.03 PMThe weekly SPX TD Sell Setup is on bar “8”, and technically, it has not been “perfected”. This leaves the possibility of another run for a marginal high. However, even if a TD Sell Setup @9 is recorded and “perfected”, the uptrend should show some cracks as the TD Sell Setup @9 will likely record below the weekly TDST Resistance at 2104.27. If the weekly should close below 2049.58, that will cancel the TD Sell Setup, and the SPX will likely see more trendless churning.


Bullish if monthly SPX closes above 2107.39 or Bearish if monthly SPX closes below 1850.61, the weekly TDST Support level on Friday, April 29, 2016. 

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2 Responses to Monday, April 11, 2016

  1. Gary says:

    Art, just for my edification, is it fair to say this week could mark an important top given the confluence of the daily and weekly (13 and 9) exhaustion counts?

    • Art says:

      Certainly that is in the cards, but given the stability of related indices, emerging markets, etc., my bias is to see any top turn into more range bound trading.

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