SPX Monthly Chart - 31 Mar 2011

     Yesterday's quarterly review noted that we were at a TD Trend Factor target. Does this mean we have made at least a temporary top? The monthly chart is telling us to watch closely.
     The cash SP500 completed a TD Combo countdown to bar #13 in February 2011. In my work this is not an automatic "sell" signal. That requires both a price flip (within the next year) and monthly price pulse sell signal; and both must occur before the signal risk level of 1402.02 is broken in a qualified manner.The fact that prior TDST resistance is at 1404.05 reinforces the notion that the signal risk level is one of importance.
     A price flip will occur in April if we close the month below 1257.64. The Price Pulse is a bit more complicated. To turn bearish would require either a print below 1249.05 (if we make a new high this month) or a print below the July 2010/July 2001 trendline (weekly basis). This trendline rises from about 1135 to 1150 through the month.
     If the March 2009 low started a new Elliott Wave pattern then we are currently in the third wave of a five wave impulse pattern or wave 'C' of a zigzag.
     Using the RSI (top pane) as a trend indicator we can see that a bear market was signaled on this time frame in September 2008. Of great interest right now is that we have rallied exactly into the area reserved for bear market resistance. That is, this indicator is saying that if the rally from 2009 is corrective in nature we have run out of steam.
     Bottom Line: The monthly chart remains in a bullish position but is telling us to watch closely for signs of a reversal. I'll take a look at the weekly chart tomorrow.