The cash S&P500 switched course and formed a down trending price bar yesterday. Let’s look at the evidence for claiming that a top is being made.1) TD Sequential signal on 11/9. The stop level with that signal is at 1121.95. The most conservative action continues to be to wait for confirmation of a sell-off which now means a close below the signal day close of 1093.08.
2) The Level 1 Alpha pulse ran from the 11/10 low to the 11/11 high. Since Beta has broken below the 11/10 low the odds are high that a turning point is in.
3) The RSI has just formed bearish divergence with price.
4) A complete zigzag pattern has unfolded from the March low.
Bottom Line: No change. I have been neutral since October 9th and remain that way now while waiting for resolution of the Sequential signal, which may come today. Also note that the pending Sequential “buy” on the dollar index will be triggered today unless we close below 75.06. This is important because the dollar index and equities have been moving in opposite directions since March.
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