Equities are moving into price exhaustion territory and sets up another possible selloff. Currently the top three indices, S&P 500 (SPX), Nasdaq ETF (QQQ), and Russell 2000 ETF (IWM) have active TD Sell Setup counts at 6. Furthermore, the SPX and QQQ all have active counts of TD Sell Countdown @12. Should the indices maintain their counts, this sets up price exhaustion early in the week. Even if the SPX takes out new highs at 3027.98, it’s likely a bull trap.
In another scenario, the SPX may have already started the descent lower. The four hour SPX timeframe recorded a TD Sell Setup @9 last week, and currently the SPX is wobbling. To have any bearish significance, the four hour SPX needs to take out the TDST Support level at 2917.12. Trading above 2917.12 with anemic VIX readings represents more of a buying opportunity.