Going into options expiration day the cash S&P500 went back into rally mode, making another uptrending price bar on Thursday. This puts the market back into (at least for the moment) a bullish position. It is now apparent that the Z pulse completed at Wednesday’s low and that an Alpha pulse is underway. The “Price Pulse (PP) Theory” is now on a “buy” signal unless the Beta – Z trendline (at 844.87 today) is violated. As before, I refuse to get too bearish until I see a break in the price pulse trend, which right now requires a break below 835.58.
Please note that the Level 2 Price Pulse (green labels) is about to complete a Delta pulse to the upside. This Delta pulse is forming an Elliott Diagonal Triangle (wedge) pattern and so tight stops (on long positions) are called for.
Targets for the end of the wedge are shown on today’s chart. 876 is a Gann target from the March 6 low and 882 to 885 is a Fibonacci cluster. I also note that the Level 2 TD (Tom DeMark) supply line that was broken yesterday was not qualified. This supports the idea of limited upside here. The last TD Anti-Differential remains the down arrow at Monday’s high and the DeMark REI indicator is still on a sell (generated Tuesday).
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