S&P 500 Trading Outlook (2-3 Days):  BEARISH
The S&P 500 Index (INDEXSP:.INX) has now risen into the first important zone where a trend reversal could take place between now and Friday.
Overall, 2520 (futures) should be an area to sell into on any opening Spike between now and Friday.  UNDER 2487, or last week’s lows, would be important and negative
Technical Thoughts… and 5 near-term concerns
Little change in thinking given such a ridiculously low range on Tuesday. The bottom line is that upside looks limited here, and DeMark counter-trend sells will come together between Wednesday and Friday of this week to show a confluence of counter-trend sells on major indices that likely limit upside and result in reversals of trend.
The area from Wednesday-Friday is important in this regard, and if this is surpassed, technically it’s right that indices could rally into 9/27-9 or 10/3-6. However, indices are growing tired, despite what yesterday’s positive S&P 500 close at new all-time highs might suggest.
The one key development heading into Wednesday which is radically different concerns the Financials, which now have risen to their own level of resistance after a sharp bounce coinciding with yields lifting in recent days. Prices have now risen to within striking distance of prior highs, and look less appealing on the long side after this move. Additional explanation is found on the charts below. To repeat the prior concerns, for new subscribers..
The following are thought to be key concerns on a SHORT-TERM basis that could prohibit prices from merely continuing straight up from here:
1. Â Dropoff in momentum in many stock market indices – Wilshire 5000, NYSE COMPOSITE, SPX, DJIA, and NASDAQ, where the rally from late August higher did NOT register a new daily or weekly momentum push to new highs. This is definitely something that we haven’t really seen in 2017.
2. Investor sentiment has turned more bullish of late – AAII Bull/bear sentiment reached a positive +19 percentage points, one of the highest marks of the year from negative the prior week.. This is a big jump in sentiment at a time when market breadth remains poor.
3. Â Seasonality concerns – This week historically has been the worst performing week of the year post Sept Options Expiration. Markets remain in a bearish seasonal time, one when markets don’t need a fundamental or macro reason to turn lower.
4.  Counter-trend Signs of exhaustion – Demark signals are within 2-3 days of being complete on SPX, DJIA, NYA, and BWORLD, and have been registered and confirmed already on QQQ. (TD SEQ and/or TD COMBO)
5.  Evidence of Technology weakening – While the Semiconductors have experienced some real strength in the past few days, the broader Tech space has not been able to advance. This seems to be a concern heading into late Sept/early October.
Chart Spotlight: Â S&P 500 Futures
The S&P 500 looks to have finally arrived at a key area where counter-trend sells should appear in the next 24-48 hours on S&P December futures, as well as SPX cash, DJIA, Bloomberg World index along with MSCI World index have all risen to levels which argue for a possible slowdown and/or trend reversal.  The next 3-5 days should be interesting in this regard to see if in fact Stocks can turn down on schedule. One should watch for evidence of 2486 being broken, which would be a more concrete signal of further downside acceleration to come.
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Twitter: Â @MarkNewtonCMT
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.
