Price Pulse Update

Yesterday was an “outside” day in the cash S&P500. Today is jobs report day. Although we still have the overhead targets discussed yesterday, I would like to update the price pulses quickly for you as we end the week:

Level 1: We are in a Beta pulse down. Weakness would be signaled on a move below 1083.74.

Level 2: In an Alpha pulse up. Beta underway with an “early warning” of a turn to bearish conditions on a break of 1083.74.

Level 3: Also in an Alpha pulse up. A warning of bearish conditions would be signaled on a break of 1050.65 (upper trendline; see chart).

Level 4: In a Delta pulse up. A break of 1029.38 would be bearish.

The bulls should hope that 1083.74 holds. If my read of the pulses is correct a break of that level could start a cascade down. However, I do expect it to hold if only because the weekly DeMark indicators have not signaled a “sell” yet. But, for those Longer-term traders/investors who are not already long I think risk is too high here and so would sit tight.

Technical Analysis of Chart positions for longer-term positions:
Dollar Index: Out. (0.65 point loss after 1 trade).
World Gold Index: Out on a close below 1179.20.

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

Inching Ahead

It was an up trending day in the cash S&P500 on Wednesday. Although we didn’t make much headway it was enough to confirm the recent break of the daily TD Supply Line. The associated target price is 1135.02 while the weekly TD Trend Factor target is 1139.40 and the monthly TD Trend Factor target is 1145.47.

Bottom Line: If now long on a short-term speculative basis you should know that the price pulses turn negative on a move below 1083.74. For those Longer-term traders/investors who are not long already I think longer-term risk is too high here to do so now.

*NEW* Technical Analysis of Chart positions for longer-term positions:
Dollar Index: Out. (0.65 point loss after 1 trade).
World Gold Index: Out on a close below 1177.80.

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

Long Term Investors Should Not Jump In Now

It was an up trending day in the cash S&P500 yesterday. Overall we have now moved sideways for 2 weeks in response to the perfected TD Sell Setup on November 17.

Yesterday we saw that the monthly chart indicated that any move above the November high would signal a continued advance to at least the next TD Trend Factor target of 1145.47 if not the higher long and medium moving averages (1168 and 1195). Such a move would also confirm the break of the weekly TD Trend Factor target of 1079.39 and qualify a break of the weekly TD Supply Line. And so a continued upward move here looks like a continuation move in the bull market. The big question is whether a longer-term trader/investor buys it or not.

Bottom Line: Still neutral but traders might consider taking a short-term speculative long position on a break of 1113.69 with a tight stop. For those interested in the Longer-term (including moi) I think risk is too high here and so I would sit tight.

*NEW* Technical Analysis of Chart positions for longer-term positions:
Dollar Index: Out. (0.65 point loss after 1 trade).
World Gold Index: Out on a close below 1190.5.

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

Monthly Chart Considered

The market stabilized yesterday with an “inside” price bar (both the high and low within the range of the previous bar) and is up strongly pre-market this morning (at 1000GMT).

A quick review of the monthly chart is due as we begin December. In the last few monthly reports I have been watching technical indicators to get an indication on whether the rally from March is complete. The first is the TD Demand Line (upward sloping dashed green line). The qualified break in October was not confirmed in November. The supply & demand lines do not indicate the rally is over as demand enters the market on every pullback on this time frame.

The second indicator is the TD REI oscillator (bottom pane). A sell signal was not generated in November since 1019.95 was not broken. Now, even though the oscillator has not persisted in overbought territory long enough to indicate that a persistent uptrend has been established, the higher monthly close rules out a sell signal from this indicator in December.

Finally, there is no sell signal between price and the RSI or between the RSI and Composite Index.

In summary, the monthly chart indicates that any move above the November high will signal a continued advance to at least the next TD Trend Factor target of 1145.47 if not the higher long and medium moving averages (green and blue lines).

Bottom Line: Still neutral but willing to consider a short-term long position if we either fail to make a new high and then continue the pullback OR if we qualify and confirm a break out above 1110.

*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 1169.40.

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

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.