Monday, September 19, 2016

A little more clarity should come when the Federal Reserve Board meets this week with a policy announcement scheduled on Wednesday, September 21, 2016. Although the announcement itself may not be spectacular, the following press conference will probably be the real source of the Fed’s intentions. Given that, the two charts of interest are the CBOE 10 Year Treasury Index (TNX) and the US Dollar Index (DXY). Both are near their respective TDST Resistance levels and breakouts above them will likely spurt a new sustainable rally. For the TNX, that breakout level is 17.39 or 1.739%, which is the equivalent level using the 10 Year Treasury. For the DXY, the breakout level is 96.129. screen-shot-2016-09-18-at-7-35-36-pm screen-shot-2016-09-18-at-7-46-37-pm

For equities, the levels for the S&P 500 (SPX) are shown below. The likely scenario is the SPX holds until the Fed meeting, and if the subsequent move is higher, it is free to complete the last 13 count for the weekly SPX before consolidating again. If the move is lower after the Fed meeting, then observe the behavior around the drawn TDST Support levels. A break under those levels are likely to power more selling.


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

Bearish if SPX closes below 2089.39 on any closing bar this week. 

screen-shot-2016-09-16-at-8-38-28-pmStill cannot rule out another lower low before settling higher. However if the lower low extends and closes below 2089.39, the bearish outlook becomes real.


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

Bearish if SPX closes below 2097.90 on any day during the week.

screen-shot-2016-09-09-at-8-12-47-pmThe 2097.90 TDST Support level still matters. A close below that significantly enhances additional selling.


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

Bearish if SPX closes below 2096.96 on Friday, September 23, 2016. 

screen-shot-2016-09-16-at-8-17-20-pmSame as last week, a weekly close below the monthly SPX bearish price flip will signal weakness going forward.


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

Neutral if monthly SPX closes below 2096.96 on Friday, September 30, 2016. 


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