Monday, April 18, 2016

The S&P 500 (SPX) is at a point where some drawdown is expected. The notable chart is on the SPX weekly where a TD Sell Setup @9 has been recorded. To gain even more perspective, the Nasdaq Composite (COMP) and the Russell 2000 are shown below.

Screen Shot 2016-04-16 at 1.38.03 PMThe COMPQ has an active TD Sell Setup @7. A trade equal or higher than 4961.30 this week would qualify bar 8 as having the true high, and ‘perfect’ the count.

Screen Shot 2016-04-16 at 2.19.06 PMFor the weekly RUT, the TD Sell Setup@8 is ‘perfected’ and free to move lower. Similar to the SPX, both the COMPQ and RUT will likely complete their TD counts below their respective TDST Resistance, providing additional impetus to the bears. If a selloff becomes a bit severe in the coming weeks, SPX 1810 is expected to hold as outlined in previous posts.


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

Bearish if SPX closes below 2061.72, the daily SPX bearish price flip.   

Screen Shot 2016-04-17 at 10.47.55 AMThe rally is managing itself well by not breaching 2028.31. This keeps the rally alive. However, with price exhaustion signals coming from longer duration timeframes, any more upside will be suspect.


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

Bearish if SPX closes below 2061.72

Screen Shot 2016-04-15 at 8.48.26 PMLast week produced another trend exhaustion point with TD Sell Countdown recording a ’13’. If the active TD Sell Setup becomes nullified, especially if the occurs below the 2078.36 TDST Resistance level sometime this week, then expectations for additional upside is greatly diminished.


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

Bearish if weekly SPX closes below 2035.94 on Friday, April 22, 2016

Screen Shot 2016-04-15 at 8.31.56 PMClassic TD suggests that if TD Sell Setup records a “9” just below the TDST Resistance level, a potential trend change is in the works. This describes exactly what is happening now, and the weekly SPX gets a chance this week to prove the bull run from the rally low of 1810.10 (February 12, 2016) will turn into a bear run. A close below 2035.94 this week should do it.


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 Friday, April 29, 2016. 


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6 Responses to Monday, April 18, 2016

  1. Vince says:

    Thanks for the pivotal update Art.

    Exciting times coming up.

  2. Trading4NandS says:

    Hi Art,

    I found your blog a couple of days ago. Good stuff. I currently use DeMark sequence counts on TOS, in conjunction with other technical tools/scripts, and use these tools to help quantify Change in Trend (CIT) dates. I’ve found certain DeMark patterns to be particularly powerful – when they complete – but to date have been baffled by the significance of DeMark failures.

    Let me start with the powerful patterns: 9-13-9, 9-9-13, and 9-13 sequence counts on either a 1-hr or 4-hr timeframe are very powerful terminating patterns, especially the 9-13-9 pattern – when the last 9-count completes a few bars after the 13-count. For whatever reason, I’ve noticed the back-to-back patterns tend to occur more frequently on timeframes less than the Daily, but I do not have an explanation for it – it’s simply an observation. The closer these DeMark patterns terminate to CIT dates the better. For example, the 1-hr completed a bullish 9-13 count on 4/11, with the 13-count perfected on 4/11. The CIT date was 4/13, providing a nice long entry clue. For what it’s worth, there is another CIT date on 4/25 (expected to be a top), so I was looking for these DeMark patterns to complete.

    But what about the failed DeMark counts? What insight do you have on those setups? For example, the SPY 4-hr chart on 4/20 was on count-6 of a 9-count, which was also a terminating 9-13-9 sequence count. The last 9-count on the SPY 4-hr failed today (4/21). Interestingly, the 1-hr chart was on a terminating 9-13-9 count yesterday as well (4/20) and the last 9-count failed on 4/20 intraday. I’m wondering if 9-count failures on shorter timeframes precede or foretell failures on longer timeframes (i.e., daily), especially near CIT dates. The SPY daily closed on 4/21 with count 7, so I’m starting to wonder if the Daily count will now fail, based on the 1-hr and 4-hr sequence count failures. If the SPY daily does not close above $209.24 (from 4/18) on 4/22, then the Daily DeMark 9-count will also fail. Are DeMark count failures what you refer to as “Bull/Bear Price Flips”? If so, any chance you can elaborate on those a little bit?

    Lastly, would you mind explaining how you derive the “TDST Support/Resistance” numbers on different timeframes from the charts you show? I apologize for the lengthy post, but I had several thoughts I wanted to make sure got conveyed.

    Cheers,
    Mike

    • vince says:

      Interesting pattern recognition. Thanks for sharing Mike. The high on the S&P500 futures on 4/20 came in 9-13-9 on the hourly chart right at the weekly TDST resistance line, to the tick.

  3. Trading4NandS says:

    Art – what insight do you have on failed DeMark patterns? Are these the “Price Flips” you mention? And how do you derive the “TDST Support/Resistance” data? Thx, Mike.

    • Art says:

      Thanks for the detailed comments and sharing you thoughts. I thought I responded, but looks like it didn’t go through. Yes, bull/bear price flips are failures in your definition. Regarding your comment on 4/20, it had a reverse price flip by less than a point. I sometimes assign a phantom 9 just to mark the only reason it did not record a 9 was due to a technicality. TDST Support/Resistance is the true high or low of the qualified 9 count of TD Sell/Buy Setup.

  4. Trading4NandS says:

    Art – Thanks for the info. This makes perfect sense.

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