SPX Daily Chart - 9 March 2011

     Today's daily chart contains a real time example of "Double Inside Bars", as both Tuesday and Wednesday formed inside price bars. Some technicians watch for this pattern since it oftne leads to sizeable moves. As Brett Steenbarger noted in his blog back in 2006, this pattern seems to be followed by upside breakouts in bull markets and downside breakouts in bear markets. His conclusion was to use the breakout as a trend indicator.
     Over the past few days I've had my own preference for an indication of which way the market would break: either a break of the downsloping trendline or a move below 1302.58. Today I want to change the downside breakout indicator from a fixed price to the upsloping dashed green line. Intraday moves either above the supply (red) line at 1325.73 or below the demand (green) line at 1305.40 would be qualified today.
     Bottom Line: Although I watch technical developments day to day my own preferred investing signals develop slowly and are not geared towards short-term trading. For me, all the charts are bullish right now except for the daily and so my Timeframe Mix is at +75%. This value ranges from 0 to 100 and gives me a long-term view as to what my cash allocation might be towards the equity markets.