The cash S&P500 formed a downtrending price bar on Tuesday. We both broke and closed below the Beta - X trendline. The odds that we now have a PRP in place at Monday’s high are very high. If so this means that a Z pulse is underway and that a “Price Pulse (PP) Theory” sell signal is in place. I use this more as a “stop loss” event and would not go short here. That must wait for at least a break in the price pulse trend, which right now requires a break below 814.53.
As today’s chart depicts, there is strong support at the 826-829 level. This support is provided by both Fibonacci confluence and two moving averages. Since the Z pulse is fundamentally the weakest in the entire cycle we should watch it for hints about overall market health. For instance, the inability to break below 814.53 will show that the bulls remain in firm control of this rally. A move now back above Monday’s high would show the same strength of course and could also be used to re-enter longs. Bottom Line: I don’t believe the bulls will give up without a fight!
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