Weakest Day Since September 2 Low

Although we had yet another new high, Thursday was the weakest day in the cash S&P500 since this leg of the rally began on September 2. It was also bar #8 of a potential 9-13-9 “sell” pattern brewing on the daily chart. To get bar #9 and complete the pattern today requires a close above 1049.34. A move below 1056.52 will qualify a break of the TD Demand Line today; and, taken with a close above 1049.34, would confirm that a pullback/correction has started.

Bottom Line: Still bullish until at least the first new rally high on or after September 21. At that point I will re-evaluate my roadmap (see July 25 post) for the next 2-3 months. What I can say *today* is that it would take a move below the September 2 low to change my view to bearish.

P.S. on the World Gold Index. The daily chart has perfected a 9 bar TD Sell Setup and completed a TD Sequential “sell” countdown. The calculated risk level is at 1029.6. We reached 1024.7 before closing lower yesterday. The TD Demand line is at 1003.0 and will be qualified if broken today. A move below 1000.4 will “flip” the price trend to down. In addition, the RSI has now made bearish divergence with the Composite Index and the TD REI POQ will trigger a “sell” below 1007.2. Therefore, it still looks to me like this index wants to make at least a short/intermediate term double top with the February high. However; being a longer-term trader/investor, the bullishness on the monthly chart will not let me take any bearish action. If I was long I would be thinking about my stops (100.4?) very carefully here.

Bulls Take One Battlefield as Rally Continues

It was a decidedly bullish day again yesterday with respect to the cash S&p500. The move through the 1062.74 and 1063.01 levels cancels the TD Combo “sell” signal on the weekly chart. With a victory on that battlefield the bulls now have to see what they can do about the potential 9-13-9 “sell” pattern brewing on the daily chart although the more bullish weekly chart does take a bunch of the “sting” out of this signal if it were to complete. To get bar #8 today requires a close above 1042.73.

Bottom Line: Still bullish until after September 21 (Autumnal Equinox) at which time I will re-evaluate. What I can say right now is that it would take a move below the September 2 low to change my view to bearish.

P.S. on the World Gold Index. On the daily chart we have perfected a 9 bar TD Sell Setup and completed a TD Sequential “sell” countdown. The calculated risk level is at 1029.6. We reached 1022.3 yesterday. The TD Demand line is at 999.53 and will be qualified if broken and a move below 1006.6 will “flip” the price trend. The price action continues to look like it wants to make a double top with the February high. However; being a longer-term trader/investor the bullishness on the monthly chart will not let me take any bearish action here. If I was long I would be thinking about my stops (999.53?) very carefully.

Showdown with 1063 coming

Another day, another up trending price bar and not much has changed. The market continues to head for its showdown with the 1062.74 and 1063.01 levels while we move ahead trying to form the 9-13-9 “sell” pattern on the daily chart. If this pattern is to play out the bulls will need to keep the rally going through the rest of the week. To get bar #7 today requires a close above 1044.14.

Notice in my first line I wrote that not *much* has changed. One thing that has is the TD Demand Line (dashed up sloping green line on the chart). That line sits at 1045.76 today but at this point is no more important than the 1044.14 mark.

Bottom Line: Still bullish until after September 21 (Autumnal Equinox) at which time I will re-evaluate. Watching closely to see whether 1063.01 will be broken.

P.S. on the World Gold Index. On the daily chart we have perfected a 9 bar TD Sell Setup and completed a TD Sequential “sell” countdown. The calculated risk level is at 1029.6. The TD Demand line is at 1001.75 and will be qualified if broken and a move below 997.2 will “flip” the price trend. The price action continues to look like it wants to make a double top with the February high. However; being a longer-term trader/investor the bullishness on the monthly chart will not let me take any bearish action here. If I was long I would be thinking about my stops (997.2?) very carefully.

Seventh Consecutive Higher High

Yesterday we had our seventh consecutive session with a higher high although the session started out with a downward bias. This foray into negative territory was brief and most likely the only immediate response to the RSI divergence (mentioned yesterday) that the bears could muster. The bulls then rallied and won the day.

Even so, I feel that the “tension” continues to grow here between the two opposing camps as the struggle over the 1062.74 and 1063.01 levels heats up. As that battle goes on we are now at bar #5 of a potential 9-13-9 “sell” pattern. If this pattern is to play out the bulls will need to keep the rally going through the rest of the week. To get bar #6 today requires a close above 1033.37.

Bottom Line: Still bullish until after September 21 (Autumnal Equinox) at which time I will re-evaluate. Watching closely to see whether 1063.01 can be broken.

P.S. on the World Gold Index. Not only have we perfected a 9 bar TD Sell Setup on the daily chart but yesterday saw a TD Sequential “sell” countdown complete. However; please note that a qualified and confirmed break above 1010.24 would cancel that situation. Until we get further proof to support the bearish case I still have no incentive to be outright negative on this market. If I was long I would be thinking about my stops very carefully.

Watching Like a Hawk

After five straight days of closing higher the cash S&P500 closed lower last Friday -- but it was still an up trending day that contained a new high for the rally. On a very short time-frame the key support level is at1028.04, the start of the latest Level 1 Alpha pulse. A break below that level would mean that a new pullback is underway; a pullback that should hold the September 2 low of 991.97.

As mentioned yesterday in the weekly review, I am watching the overhead 1062.74 and 1063.01 levels to see if they end up being broken, qualified and confirmed (on the weekly chart). While this plays out I am keeping an eye on two items on the daily chart . First, I want to see if we can create a 9-13-9 “sell” pattern. We are on bar #4 of that last 9 now. To get bar #5 today we must close above 1025.39. Secondly, I want to see the reaction to the divergence between price and the RSI. Although we made a new closing high last Thursday the RSI did not. Continued weakness in this indicator has me worried; and the futures are down more than 10 points very early this morning.

Bottom Line: Still bullish until after September 21 (Autumnal Equinox) at which time I will re-evaluate. Watching closely to see whether 1063.01 can be broken.

P.S. on the World Gold Index. We now have a perfected 9 bar TD Sell Setup on the daily and are at TD Sequential countdown bar #12. In order to complete a sequential countdown it is imperative for the market to qualify and confirm the break above 1010.24. Meanwhile, the weekly chart shows a new closing high without a new high in the RSI indicator. A turn down next week could spell trouble for the bulls. But, until we get further proof to support the bearish case I still have no incentive to be outright negative on this market.