The cash SP500 closed below the short (red) moving average yesterday and reached for the medium (blue) average. There is also Fibonacci and demand line support just under 1325 and then the long average with TDST Support at about 1313. We should also note the large gap just above TDST support. The short moving average on the weekly chart is at 1325.14 right now, adding further emphasis to the fib cluster and demand line just mentioned.
Continuing the discussion on qualified breakouts from yesterday .... I have marked the March 1 bar with an arrow. Even if one can say that this price bar broke the medium (blue) moving average and that the break was "qualified" the next session, what does it mean to say "that the qualified break was a warning that lower lows were still to come?" Does this mean they will come six years from now while price rallies 423% in the meantime? Obviously any useful 'warning' of lower lows must mean 'soon' and must imply only a very 'modest' rise in the other direction first. I think the next step is to try and quantify 'soon' and 'modest' if possible. As a first guess based on an inadequate visual survey of some charts, I will propose that soon = within six bars and that modest = no more than the previous price fractal (defined as a high (low) greater (less) than the two highs (lows) both before and after it. By this rule, the qualified weekly chart break of the 1363.53 risk level is warning that we will be at new highs within six weeks and that the March 18 low will not be violated. If we close today without violating 1294.7 then that becomes the low that will not be violated. I will continue to monitor and tweak these variables going forward.
Bottom Line: The allocation mix meter remains at +100%.
2 comments:
Very interesting and certainly very methodical -- much more so than I am. My own focus at this point is whether or not the SPX can break thru this confluence of support in the next couple bars and break the Daily TDST. If so, then we have high odds of a Buy Set Up developing and perhaps more. If not, then the bullish nature of this last Sell Set Up (it easily broke above 2 higher peaks) will maintain, and up we go.
Thank you for your efforts. Your work with these qualified breaks has my attention at least.
I appreciate your thoughts and comments! Based on today's action so far it looks like we may not qualify the break below the short moving average.
Sax
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