Regardless of the news or intraday volatility, the cash S&P500 has made downtrending bars over the past three trading days. This brought us to a new low for the year yesterday and shows that the intermediate term X-pulse low still can not be claimed to be done (see chart). Notice how the short moving average (red line) provided resistance on both March 12 and 14.Market action has suggested that my idea of using the short term price pulse chart to generate a stop was wrong. As a swing trader who went short (when the Intermediate price pulse chart generated a “sell” on Friday, February 29 at 1327.03), the large counter-trend rally on the 11th and 12th should have been ridden out. Of course this is easy to say in hindsight but is the reason why I am trying to develop a trading model around price pulse theory.
At this point I believe that emphasis must be on watching for an intermediate (x-pulse) low. This is highlighted by the fact that an a-b-c Elliott Wave pattern may have now completed from the February 1 high. Price pulse theory says that the coming y-pulse can rally as high as the resistance zone marked. At this point a very tight stop (perhaps yesterday’s high) would be called for. Note that the weekly chart is still on a technical “sell” and so there is no thought of going long on any bounce.
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