In general the cash S&P500 has been moving sideways over the last five sessions. In particular it formed an “inside” day on yesterday’s daily chart. After threatening to march higher last Friday after breaking and qualifying the TD Supply line (horizontal dashed red line) we failed to confirm that action yesterday. Another bear-friendly development was that the RSI failed to make a new high last Friday with price; solidifying the recent technical “sell” signal (bearish divergence between the RSI and Composite indicators).The weakness just mentioned comes on the heels of a TD Combo 13 signal. For today, the TD Demand Line (up sloping dashed green line) stands at 1004.41. A break below this level will qualify the demand line. Initial support levels are: around 996 (the short moving average) and 961 (Fibonacci and TD Trend Factor).
Bottom Line: I still think the evidence favors the view that a pullback is beginning. In my work definitive proof would be provided by a break of 992.49 (last Thursday’s low). TD Combo risk level calculated at 1038.92.
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