After moving slightly higher on Monday the cash S&P500 sold off yesterday. Note how prices went down to the short (red) moving average. This moving average contained the decline at the end of December.If the short average can not hold we will continue lower to the next immediate target which would be the medium (blue) moving average. This line was the target for many of the recent pullbacks on the chart shown.
Also note that the TD Demand Line (dashed green) was broken. This is a qualified break and a move below yesterday’s low will confirm the short term bearishness. If confirmed, the TD Trend Factor target is at 1085.81 (purple line segment); which is where the long (green) moving average is now.
As far as trading goes .... All we can do is wait on Friday's close and see whether the weekly REI has been relieved of its overbought condition. As of yesterday's close it had not.
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