At the start of my holiday last week I was of the opinion that “… equities have started their most significant pullback since the rally from the March 6 low began. The “proof”, so to speak, will be a weekly technical sell signal which we have to wait until Friday for (but seems increasingly likely).” The sell signal was registered on the weekly chart last Friday and the cash S&P500 has moved lower, hitting targets at 903 and then the weekly moving average and a Fibonacci level near 888.
We have bounced off that 888 target (which is also near the 23.6% Fib retracement). Old weekly resistance (always watched to see if it becomes support) is at 890. On the daily chart we have reached 8 bars down towards a possible TD Buy Setup. The TD Demand Line (thin dashed green line on today’s chart) is at 889 and the TD Supply Line (thin dashed red line) is at 907.66. Both of these lines would be qualified if broken today.
Let’s see if the market can “perfect” the potential TD Buy Setup by moving below 888.86. I think we need to see that before one can speculate on any renewed rally to the upside.
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