Decision Day

One rally day complete. Can the bulls do it one more time? Today the “magic” number is 1098.51. A close below that number and the TD Sequential “sell” signal is triggered. Close above it and we have a new TD Setup, which cancels the pending sequential “sell” signal and prevents us from reaching a combo “sell” (today is #13). Beyond that, a move above yesterday’s high would confirm the TD supply line break of yesterday and of course would also be bullish.

And so the door is still open to a possible Tuesday reversal. Do the bulls have to slam it shut? What other non-bullish factors may come into play?

* The RSI would make yet another bearish divergence with price on a pullback today. So would the Derivative Oscillator and the RSI would also bearishly diverge with the Composite Index.

* A Sequential “buy” has been triggered on the dollar index which is important because the dollar index and equities have been moving in opposite directions since March. Unless the index trades below 74.10 there are still reasons on why the equities are topping here.

Bottom Line: I have been neutral since October 9th and remain that way now while waiting for resolution of the Sequential signal; which will come today. If it gets canceled (for reasons explained above) I am willing to consider getting bullish.