After making a slightly higher high (to meet the positive reversal target in the RSI that projected to just below 914) the cash S&P500 turned lower on Wednesday. Although we ended up with an uptrending price bar the session was decidedly bearish. If Wednesday’s high was the end of the Y pulse then it can only mean that Z is underway and we should see 879.61 taken out in short order. A failure to do so has bullish implications.
Will the price action finally break through one of the TD lines? The Demand line sits at 882.69 along with the intermediate moving average is (solid blue line on the chart). However; if we do break that line today (which is what I suspect) it will not be qualified and so would not trigger the trend continuation trade. The Supply line lies at 920.42.
I have a sneaking suspicion that this market wants to continue to burn both the longs and shorts. I can see a scenario where we decline early today (to just below 879.61?) but then begin a vigorous snap back rally that keeps the overall consolidation going.
The experimental trade position remains short from 897.34 (5/12); stop & reverse at 930.17. Lower the stop & reverse to 924.61 on a move below 879.61 Tuesday.
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