After two days without power and the internet it is good to be back to a normal routine. But wait ... it is still not normal. Apparently Blogger has been having a major outage. Who knows when this post will make it onto the interwebz!
On May 5 the cash SP500 closed below the short (red) moving average but that event went unconfirmed the next day, leading to a bounce higher. On May 10 the index closed above the short (red) moving average but again the next day's action failed to confirm and a pullback ensued. On Wednesday we once again closed below the short (red) moving average. Yesterday the price action confirmed the break. By the hypothesis I am testing, this warns that we will see price below yesterday's low by the end of next week. Let's see what happens.
If the same analysis is done using TD Lines, we see that the price action failed to close below the demand line (dashed green upsloping line) indicating short term bullishness. For today, there can be no 'qualified' break of the supply line (downsloping dashed red line), and this seems to support the notion that another dip down is necessary. The primary support zone to watch on any decline is the area shown by the blue box.
Bottom Line: The allocation mix meter remains at +100%. I still expect to see new highs before the April low is violated.
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