Signs of a Significant Top Continue to "Sprout"

Although not as strong a down day (as objectively measured by the swing index) the cash S&P500 still drew a down trending price bar on its daily chart. Price has been declining since the TD Sell Setup was perfected on October 19. Yesterday’s decline has now produced a complete five wave count (and hence price exhaustion) under D-Wave from the March low to the October high.

So where are we with regards to this developing pullback? Looking at the attached chart we can see that we are still in contact with the medium moving average (solid blue line). Yesterday’s low was at the 50% Fib retracement of the rally up from October 2. If this is not the low where else should we look? Three technical targets jump out, the first being the gap from 1057.58 - 1060.03 formed on October 7-8. Interestingly the weekly long moving average sits at 1057.35 today. The next target is the 1048-1051 level. Here we have a Fib retracement, TDST Support, and the price target from the recent break of the TD Demand Line (up sloping dashed green line). Below that is 1016-1022 where we have the last swing low, previous TDST Support, a TD Trend Factor target and the area to which the long (solid green) moving average is moving.

Working Road Map: With momentum indicators having failed and two versions of the Elliott Wave count showing large patterns having possibly completed, I think the odds that a significant top is in are now quite high. Still neutral (since October 9th) but looking to get bearish. Here is my best guess for what happens over the coming days: The next short-term bottom (which is due this week) will lead to a push up that must complete by November 6 and will most likely fail to make a new high. I am looking for TD Sequential and/or Combo “sell” signals on that bounce to turn me short-term bearish. In the meantime let’s see how price reacts to the 50% Fib level reached yesterday and/or the lower targets mentioned.