There is clear FOMO in pockets of the market. However other pockets are looking like they are playing catch up, which is providing continued elevation in stocks. Starting with the longer term time frames, the intermediate weekly S&P 500 (SPX) chart recorded a TD Sell Setup @9 + 9. The interpretation is the market will enter the price exhaustion phase. Since momentum is still strong, we’ll need to drill down to lower time frames to get a better look at timing.
Also, the driver of the rally has been semi stocks and the weekly Vaneck Semiconductor ETF (SMH) has an active TD Sell Setup @7. This is suggesting 1-3 weeks of more upside.
From the prospective of the daily SPX, it has closed the week by recording 13’s on both TD Sell Countdown and TD Sell Combo. With TD Sell Setup @2 and TD Trend Factor at 5244.63, a top on March 11th or 12th is scheduled. If that scenario should play out, look for signs that volatility is about to start. Another scenario would see the active TD Sell Setup price flip bearish before March 11th or 12th with the SPX closing below the close of the prior four bars. In this case, this just could be a mean reverting trade that likely sets up higher again.
If a bearish price flip does occur on the daily SPX, it will likely occur during Jerome Powell’s March 6th House of Representatives testimony. The four hour SPX has active TD Sell Setup @5 and could record a 9 count on Tuesday. March 5th which sets up market vulnerability on March 6th. Again, it would likely be a mean reverting trade unless the SPX closes below the proposed TDST Support at 5061.11. Absent of that, observe signs of a toppy market that culminates to the middle of March.
Trade Trekker 