The cash S&P500 formed an “inside” day on Monday. This raises the odds that Friday’s high is a Level 1 PRP and completed a Delta pulse. If so the market is now in an X – pulse. Price Pulse Theory would expect the market to drop below; perhaps significantly, the Beta Pulse bottom of 826.83. Corroborating this theme is the fact that yesterday’s price action negated the TD Supply line break of last Friday on the daily chart.
Today’s chart has two TD Lines to watch. The green up sloping Demand Line lies at 848.38 and would be qualified if broken today. Breaking below this line projects to 816.34, although the first target down would be a retest of the 823-827 area. On the upside is the TD Supply line at 870.27 which would also be qualified if broken today.
Bottom Line: I still favor the bearish view that ultimately looks for a retracement of the March 6 to April 17 rally that goes below 780.
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