The cash S&P500 index traced out another very weak price bar last Friday, this time of the downtrending variety. The current price pulse remains firmly down from last Monday’s high and we are now just above the Fibonacci & Gann cluster around 1497. With that target looming close I will raise my stop on the open SH trade to 58.61 on any cash S&P500 reading of 1500.25 or less.
Our ongoing bull run and associated Elliott wave count from the August low is in jeopardy and I talked about this in my weekly chart posting yesterday. One measure of “bullishness” that I like to see is the RSI holding the 40 area on pullbacks. That indicator sits there now. If it goes lower that will be another strong reason to question the current impulse wave count. Of course, a move in the index below 1479.41 will kill the impulse count instantly as a fourth wave can not move into the territory of the previous first wave in a trending impulse pattern. From a timing viewpoint I think we will know by Wednesday.
Finally, today’s chart also shows that the long moving average I use is right at the market. There is technical support here for the s&p. Whether it holds it or not is another question.
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