Tuesday, January 18, 2022

The S&P 500 (SPX) was able to rally early in the week to a standard 61.8% Fibonacci retracement before dropping to end the week near the middle of the weekly range. The current trend is skewed bearish, and the best thing the SPX can do is wash out by continuing the active TD Buy Setup currently on a 2 count. If TD Buy Setup stays active, TD Buy Setup will record a 9 count right on the first FOMC meeting of 2022 on Wednesday, January 26th. This represents the clearest risk/reward choice to buy the dip as the first rate hike will probably be priced in. If the low has been made last Monday, January 10th, the SPX can undo much technical damage by surpassing the 45 and 60 minute TDST Resistance at 4729.39. The most probable outlook for the week is none of the above and markets churn in a volatile range. 

From the Nasdaq Composite (COMP) the TDST Support at 14571.64 can help dictate the next price trend. Close below 14571.64 starting Tuesday, January 18th, and probability of the SPX seeing TD Buy Setup @9 becomes high. Hold the level, and the focus is on the volatile churn or to a lesser extent, another bull run.

The daily CBOE 10-yr Treasury Index (TNX) which represents the yield for the US 10 year recorded a TD Sell Setup @9 last Monday, January 10th. Note previous instances shaded in the chart. There are two recent instances and both show a dip after recording a TD Sell Setup @9 before marching to another high before true exhaustion occurs. If we handcuff the SPX and TNX together, and make the assumption the SPX does record a TD Buy Setup @9 next Wednesday, January 26th, and the TNX follows the same pattern by overrunning TD Sell Setup perhaps 2%, the next leg will suggest retreating yields and higher SPX. 

Bitcoin (BTC/USD – Coinbase) has officially recorded a TD Buy Setup @9 on the weekly chart. It now has the conditions to make a run following the SPX course. 50-53k is the obvious first price target. 

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