After posting a completed TD Sequential Countdown last Tuesday the cash S&P500 has basically gone sideways. The rule of thumb is to watch for a reaction (in this case a decline) to occur within 12 bars of countdown completion - which in this case means September 11. On a weekly basis (see yesterday’s post) I am watching 1062.74 (bullish) and 1014.91 (bearish) as key levels. Since; based on the daily chart, I describe myself as “Short-term bearish“, I think we visit 1014.91 before 1062.74. One of the events to watch for after a completed sequential countdown is a “price flip”. This is construed as an indication that price is in fact reversing. For today we need a close less than 1028 to “flip“ price downwards. In the process of doing that the bears will have to face the current TD Demand Line (upward sloping dashed green line on chart) at 1025.62. Interestingly, a move through that level would not be qualified today and so it appears that it will be a battle just to get the close below 1028 today. In the most optimistic case I think the bears would be elated if they can hit the short moving average (bright solid red line) at about Thursday’s low of 1016.
Bottom Line: Watching for a down trending day today that closes below 1028 and puts the bears in a position to challenge the 1014.91 level. I remain Short-term bearish but then expect a resumption of the rally that brings us to new highs and lasts at least until the Equinox. I would re-think my short term bearish view on a break of 1049.93.
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