The S&P 500 (SPX) did not meet the criteria for the 9/13/13 trifecta last week. In fact the weekly drop was deep enough to cancel the TD Sell Setup. This leaves TD Sell Countdown and TD Combo Sell, which their respective 13’s are deferred until their objective rules are met. In addition to the SPX, which we will get to below, the Nasdaq indices and the RUT are also aligned to meet price exhaustion on the weekly charts.
From the Nasdaq (COMPQ) weekly chart, TD Sell Setup has recorded a ‘perfected’ count, meaning the recorded 8 count could be the true high of the entire TD Sell Setup sequence of counts 1 through 9. As long as this week’s COMPQ closing bar is above 5221.12, the market is free to sell off. Note that if the closing bar is 5221.12 or below this week, the COMPQ is still free to sell off but won’t be defined by any TD counts, and observing TD Counts of related indices would practically be mandatory.
From then small cap Russell 2000 (RUT) index, the first of three price exhaustion signals has been recorded. TD Combo Sell @13 was recorded on Friday, July 29, 2016, which provides the first mark where a selloff may commence. The other two signals, TD Sell Setup and TD Sell Countdown are one count away from achieving a respective 9 and 13 price exhaustion point.
If the SPX, COMPQ and the RUT can produce another high this week, we can officially begin the consolidation process, which can be long and drawn out until the November elections. More on that next week when the August month closes in a few days.
S&P 500 (SPX) SHORT/INTERMEDIATE TERM OUTLOOK: BULLISH
Neutral if SPX closes below 2168.50 on Monday, August 29, 2016.
S&P 500 (SPX) INTERMEDIATE/LONG TERM OUTLOOK: NEUTRAL
Neutral until further notice.
S&P 500 (SPX) LONG TERM OUTLOOK: BULLISH
Neutral if monthly SPX closes below 2065.03 on Wednesday, August 31, 2016.