S&P Futures: Some DeMark Indicators Are Neutral, but Emphasis Is on the Bearish

By Fil Zucchi  AUG 20, 2013 10:30 AM

A look at the S&P pit contract on a daily and weekly timeframe, using the Sequential and Combo Countdown indicators.


In response to my Friday post on Minyanville's Buzz & Banter (subscription required), in which I looked at the S&P 500 (INDEXSP:.INX) in DeMark terms, a sharp-eyed Minyan suggested that DeMark indicators are in fact rather bearish on the market. He highlighted the fact that Tom DeMark suggests looking at the S&P pit contract (SP1) as the most reliable of the SPX-related instruments, and that the TD Sequential Countdown indicator (as opposed to the TD Combo Countdown I referred to in Friday's Buzz) is quite bearish on multiple timeframes.

First off, let me clarify that the gist behind my Buzz was to convey that the market seems on thin ice here. The fact that the Combo Countdown signals expired before the market turned down doesn’t mean that selling pressure isn’t there. That’s why I pointed out that the daily and weekly Buy Setup counts are very early in the process.

But for more perspective, it is certainly worthwhile to revisit the Combo and Sequential Countdown indicators applied to the SP1 chart. Here are the highlights of each in daily, weekly, and monthly timeframes.

First, the Sequential Countdown:
Next, the Combo Countdown:
To summarize, looking at the S&P pit contract on a daily and weekly timeframe, the Sequential and Combo Countdown indicators as well as the other indicators discussed above paint a neutral to bearish picture, with an emphasis on bearish. The monthly charts are neutral to bullish. The key levels I’m focusing on before getting far more bearish are an August close below 1592.20, or a September close below 1629 (either would print price flips on the monthly chart), and a break of daily TDST Level Down at 1573.30, especially if the break is qualified. 

Twitter: @FZucchi

Editor's Note: At Minyanville we often argue that markets and stocks are driven by four primary attributes: the fundamentals, the technicals, the structural, and psychology. In this weekly piece, trader Fil Zucchi will attempt to digest these four measures to come to actionable recommendations, but with a couple of twists: Rather than relying on standard technical analysis, he will examine the technicals through the lenses of “DeMark” indicators. And rather than highlighting straight entry and exit points for stocks, he will use options to gain long / short exposure, control risk, and generate cash flow. Investors should note: This column will be written 1-2 days prior to publication, so by the time it appears the prices of the securities mentioned may have changed.
Position in SP1

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