Now What?

Even though it was only an “inside” day on the cash S&P500 it was enough to cancel the pending TD Sequential “sell” signal. With a new TD sell Setup in place it also prevents the combo “sell” from executing. So now do I turn bullish? No.

For starters, if price were to extend the setup without a price flip so that the 161.8% level was reached the TD Combo signal would be back on. Additionally, even if the sequential were to recycle here there is still the fact that oftentimes a pullback is experienced within 1-4 sessions of completing a perfected setup. Also note that we failed to move above Monday’s high and so we failed to confirm the TD supply line break. Also still of importance:

* 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. The index had an up trending day yesterday.

Bottom Line: I will remain neutral but willing to consider buying on a pullback.

*NEW* Technical Analysis of Chart positions:
Dollar Index: Long from 75.32; stop 74.10; weekly chart on perfected buy setup.
Gold Index: Neutral.
10 yr Bond Yield: Neutral.
Cash SP500: Neutral.
CRB Index: Neutral.