Tuesday saw another downtrending day in the cash S&P500 which caused Monday’s high to become a price fractal and cemented the view that the L1 Alpha pulse high is in. The move below 897.34 put the blog’s draft trading system short. The move down yesterday also fulfilled the TD Demand Line target of 898.99; after which we promptly rallied back towards the opening price.
The bounce underway from yesterday’s low is not unexpected as we have closed below the TD Channel (shown on today’s chart) for two days running. Of course, if the bull has been gored we should expect the previous high to hold. A move through the TD Supply line at 929.70 would be qualified and turn the short-term picture back to bullish.
On the bearish side our first support level is again in the 895-899 area. Below that 868-878; which encompasses the 23.6% Fib retracement; old TDST resistance and the first downside TD Propulsion factor target. 870 is also in opposition to the 930 high.
Experimental trade position: Short from 897.34; stop & reverse at 930.17.
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