It was a simple up trending day to new highs on Thursday …. Or was it? I think the picture just got a bit more complicated with yesterday’s price action.We did have a qualified break of the TD Supply line (dashed red line cutting through yesterday’s price bar which I have mistakenly been calling the demand line the last few posts) at 982.09. That is step one in the process. Before we can project another large run up in price we need to see step two: the breakout must be confirmed. Confirmation may only occur today if we trade above 996.68.
Yesterday’s price action has adjusted the TD Demand Line (the upward sloping green dashed line) so that it sits at 983.39. A break below that line today would be qualified. However, even if qualified today and then confirmed next Monday it would only project a shallow retracement of the rally. Of more concern at this point is holding Wednesday’s low. If I have my price pulse cycles correct the rally should persist at least until next Thursday, and so any break of 968.65 (Wednesday’s low) should be taken as a sign that the larger Alpha pulse (shown in last Saturday’s posting) is complete and that a more significant pullback is possible.
Bottom Line: Still bullish but the odds of a more significant pullback within the ongoing rally are increasing.
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