S&P 500 Trading Update: One Final Hurrah Into Holiday Weekend?

Mark Newton

S&P 500 Futures Trading Outlook (2-3 Days):  NEUTRAL WITH UPSIDE TO 2760-2765

But I’m growing more cautious on this uptrend…

While daily charts still show the potential for S&P 500 to move a bit higher, we’re starting to see some breadth divergences with Negative Advance/Decline with the VIX (Volatility Index) getting jumpy.

This comes at a time when investor sentiment is getting frothy. Sentiment isn’t a good timing indicator, but the fact that it’s at extremes while DeMark indicators are aligning, adds some concern to the bullish argument right here.

The S&P 500 requires its own move back to new highs to generate an 8 count per this Sell Setup, aligning with the current TD COMBO and TD SEQUENTIAL sells in place. But, until the Sell is confirmed by a “price-flip”, it pays to expect one final push. Cycles align with 1/16-17, so a final “hurrah” into end of week/early next week would make sense.

Active traders should consider selling any rallies over 2760 in March Futures and consider adopting hedges ahead of the long holiday weekend. Any move back under yesterday’s 2736 turns trends bearish for pullbacks.

XLF Financial Chart Spotlight

Financials and Tech could help to hold stocks up… here’s the Financials Sector chart (XLF).

xlf financial sector etf trading chart bullish rally_january 11

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Author has positions in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.