The bounce experienced on Tuesday was completely erased yesterday. As 'Wallfly' pointed out in a comment the other day, trying to pick a low here is fraught with risk since the higher level charts are so negative. Keep in mind that I am not a trader but rather a long term investor. I track the short term movements but only to keep my finger on the pulse. Lately I have lightened up my position to 50% (allocation meter) and will take more money off the table if we break below the March low.
That being said, with the risk level of the recently completed daily buy setup below the market (horizontal dashed cyan line at 1254.24) combined with a still developing bullish divergence between price and the RSI/Composite index, I still think a rally is coming before we break below the March low. That being said, I wouldn't take such a long trade even if I was a swing trader. Why? Because the buy setup completed below TDST support (horizontal dashed green line at 1279.2).The trend is down; risk is high.
Bottom Line: The allocation mix meter is at +50%. My near term scenario assumes that an intermediate term low will be made above the March low and that a choppy rally will then take 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.
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