Level 1 Price Pulses

The market (cash S&P500) soared yesterday, breaking out above 1088.34 -- The risk (stop loss) level associated with the TD 9-13-9 signal of September 18. If that breakout is confirmed tomorrow then the bears will have to wait for the next TD sell signal. However, I for one will not be chasing this move even if the breakout is confirmed and prefer to sit on the sidelines here.

For something more technically oriented, I present for your consideration the Level 1 Price Pulse chart. The pulses are labeled in blue and the derived Elliott Wave count in Black. Recall yesterday that the Level 4 chart showed that an alpha pulse began from the July low. Today’s Level 1 chart uses that date as its starting point.

Over the near term, the market is now rising in a Y pulse. In the current formation from the October 2 bottom the “sell” signal would be the Beta - X trend line which will be at 1075.02 today. Using the pulses would one actually close longs or go short if that trend line was broken? Not necessarily. It depends on the higher level pulses. I will present the Level 2 situation tomorrow.

As far as the Elliott count goes, notice that wave 5 can not be longer than wave 3 if the count is to be valid. That point is at 1108.13. The current fifth wave is part of the larger wave C (or 3) discussed yesterday from the March bottom. I prefer the scenario where we are in the late stages of completing an A-B-C Zigzag.