NDX/SPX Tuesday 21 July 2020

The model had a regime shift yesterday from “Buy the Dip: Amber Alert” to “Buy the Dip”.

·What is the difference? The former has a tendency to take hold after the latter just before the market springs a nasty surprise.

Think of it as a clear warning of the potential for a 2x4 to the forehead.

The LT cycle remains a tail-wind as previously mentioned…

Last week’s purchase of NDX was further aided by the following timing indicator ‘p’ a.k.a. ‘Positive Reversal’. Recall that first I pay attention to the LT cycle, then the HMM/MDP and then timing or additional positioning can be aided by this or other tools such as the Composite Global Sentiment Regime.

The outlook for the NDX is a back-and-fill process that leads to further gains with the aforementioned 10310 pivot acting as a re-assessment level (arrows below are not an indication of time). The near-term target is ~11,400 and perhaps we may reach that in time for a ST cycle peak in the 24–31 July window.

On AMZN I can narrow the suspected mid-point to 2870/2920 which implies that 3500 is a near-term target.