A Bit More Volatile

A bit more volatility was evident in the cash S&P500 yesterday. After rallying to touch a new high the market promptly reversed to close lower, forming an outside price bar with a lower close. This overall downside action comes after the market perfected a TD Sell Setup on Monday and follows failure in numerous momentum indicators. We continue on day 11 out of the required 13 for a Sequential and/or Combo sell.

Please note that the Level 1 price pulse Beta - X trend line has now been clearly broken. This is a warning signal that the whole structure is weakening.

Working Road Map: With momentum indicators failing and the Elliott Wave count showing a possible large Zigzag nearing completion, I think risk of a reversal is too high to be going long now. Still neutral (since October 9th). Here is my best guess for the end to this bull run: A decline is underway satisfying the recent TD Sell Setup. Now that we have broken the Beta-X trend line we have to see whether we can hold above 1066.71. I think we will and then we’ll get a final push up that will conclude no later than November 6 and fail to break above 1108. Failure to hold 1066.71 would not rule out a final push to new highs but would lower the odds of that happening.