On Monday the cash SP500 broke TD Support of 1279.20 in the process of meeting the weekly TD Trend Factor target of 1265.68 - the low of the day was 1265.64. This price action also completed a daily buy countdown bar #9 and bullish divergence between price and the daily RSI. It looks like any rally from here might just be counter trend.
The hourly chart has shown a good attempt to form a base from which to rally over the past two sessions. There was bullish price/RSI divergence yesterday and the market is fighting to finally hold the area reserved for bull market lows; which is an important first step in starting a rally.
In today's session I will be watching to see if any rally attempt at the open can clear the 1279.52 level. If so, Chuck tells me that this will mean the Elliott Wave from the 1345.2 high is complete. He says it would be either wave '3 of C' or 'c of C' (depending on whether an expanded Flat or triangle is forming from the February high. I have added Chuck's count to today's chart. Most importantly would be a bullish price flip on the daily chart - a close today above 1279.56 would do the trick. If these two conditions are met we may have an actual multi-day rally attempt on our hands.
Bottom Line: The allocation mix meter is at +50%. My near term scenario has the current decline ending imminently (if it hasn't already) and holding above the March lows. This will be followed by a choppy rally that takes us back above the 1344 level. However; I remain quite concerned that the high may already be in for the rally from the 2009 low.
2 comments:
Saxby, I don't recall seeing 2 unused TDST's crossed to begin with, and secondly that they were crossed so easily -- with very little bouncing. It would strike me that a higher time frame is strongly "governing" here and that your chart posts on the weekly may be most pertinent. Of course, the market can give us a good bounce at any time, but after yesterday's action I'm looking for a more likely stop at 1219.50 -- the weekly TDST. Just a thought. This strikes me as most unusual.
Wallfly, I agree with you that the market is in an overall weak position. I think where we may disagree is with the extent of any rally attempt from here.
Perhaps I am too optimistic!
Sax
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