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Market Analysis - 6/2/2016

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In chart 1 below, the Philly Semiconductor Index ($SOX) is shown to have finally reached the SHARK's PRZ (Potential Reversal Zone) ranging from 702.52 (2.236 AB) to 710.07 (1.13 0X). As of Wednesday's close of 703.29, this index is only 0.96% away from the top of the PRZ range. Moreover, a TD Sequential Sell 9-13-9 is evident on the chart, and it has an associated TD Risk level of 705.27. Should $AVGO deliver a favorable earnings report on Thursday evening, look for the $SOX to threaten the top of the PRZ at 710.52. But also be on the lookout for a swift profit-taking wave, forcing the $SOX to close below the aforementioned TD Risk level. Otherwise, the TD Sequential Sell signal would be invalidated.


Chart 1. $SOX Daily Chart. Price is now inside the SHARK PRZ.

I'd also be curious to see whether $AAPL reaches the downside target depicted in chart 2 BEFORE today's close. If so, it 's likely to turn back up on a favorable $AVGO earnings report.


Chart 2. $AAPL's rally exhausted upon bouncing from 89.47 on May 12th to 100.73 (exactly the 2012 high) on May 26th.


Chart 3. $AAPL's HS depicted in chart 2 formed upon reaching the 100.72 level last week.

Finally, in charts 4 and 5 below, the S&P 500 ($SPX) is shown to be 1% away from the SHARK's PRZ ranging from 2120.36 (1.13 0X) to 2121.31 (1.618 AB). That's impressively tight! Moreover, the 240-minute chart depicts a TD Sequential Sell 9-13-9 signal with an associated TD Risk level of 2119.92, clearly coinciding with the top of the PRZ. As for the daily chart, TD Sell Setup bar #9 is due tomorrow. 


Chart 4. $SPX 240-minute chart. TD Sequential Sell 9-13-9 is evident on the chart, and it has a TD Risk level of 2119.92. 


Chart 5. $SPX daily chart. TD Sell Setup bar #9 is due on Friday.

In conclusion, we're looking for a trend reversal in the S&P 500 to begin from the 2120-2121 area.

Trade smart,

 Peter 


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