Short Term (at Least) Weakness Indicated

To catch up …. Last Wednesday I said that “Odds favor the view that a short-term price pulse high was made yesterday and that risk is to the downside until December 2. The positive reversal in the RSI has an open upward price projection of 1114.46. I will be watching closely to see whether it gets filled or not because a failure would have longer-term bearish implications.“ As we know the cash S&P500 declined sharply on Friday. This caused the RSI reversal to fail, and so at first blush it seems that continued weakness is likely over the near term.

It appears that near term weakness is also indicated by the weekly chart as well as we failed to confirm the upside breaks above both the TD Trend Factor target and the TD Supply Line. This leaves the weekly chart with continued bearish RSI/price divergence, and an open downside price projection of 987.51. On the daily chart, more modest (and closer) targets include 1081-1083. This area is important because a move below 1083.74 today will confirm the TD Demand Line break and project a downside target of 1060.25. Note that this is where the 61.8% Fib retracement is. Below that we have previous TDST support and the long moving average at the 1047-1050 area.

Bottom Line: Still neutral but might be willing to consider a short-term long position if we continue to pullback during this week. I will be watching the action at the downside targets of 1081-83; 1060-62; and 1047-50.

*NEW* Technical Analysis of Chart positions for longer-term positions:
Dollar Index: Out. (0.65 point loss).
World Gold Index: Out on a close below 1164.00.

Waiting for initial signals on the following charts: 10 yr Bond Yield,
Cash SP500 and the CRB Index.