Hmmmm.... Still Waiting on the Sequential

As outlined yesterday the weekly chart leans to the bulls being back in the driver's seat if they can continue this rally over the next two days. What does the daily chart have to say about this?

First off, two nice up trending days would most likely result in a new TD Setup, which would cancel the pending sequential “sell” signal and prevent us from reaching a combo “sell”. Such a rally would also likely break, qualify, and confirm the overhead supply line; which is bullish. So yes, a bullish Monday and Tuesday would confirm the weekly chart’s rosy outlook for the next few weeks.

But what if we don’t get a strong couple of days to start the week? The morning futures are strong but what if, for instance, the retail sales numbers disappoint this morning? The first thing to note from the chart is that unless we open above 1098.78 on the cash S&P500 we will make a qualified break of the TD Demand Lines (upward sloping dashed green line). This would, even if we have a bullish Monday, keep the door open to a possible Tuesday reversal. What other non-bullish factors may come into play?

* TD Sequential signal on 11/9. To execute this signal we have been waiting for confirmation. We almost got it on Friday (needed a close below 1093.08 but we closed at 1093.48!) Today we would have to close below 1093.01. The stop level with this even would be at 1121.95
* The RSI has recently formed bearish divergence with price.
* Finally, the Sequential “buy” was 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 is reason to believe 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. If it gets canceled (for reasons explained above) I am willing to get bullish or at least remain neutral. I won‘t fight the weekly chart.