The cash SP500 declined again, this time to the TD Support Line associated with the currently active sequential sell countdown. This support zone (1275-79 area) and the 1263-66 area are the last ones before the critical March bottom.
On the hourly chart yesterday: After starting the session by forming a TD Sequential Buy Countdown Bar #13, the market bounced creating positive divergence between price and the RSI. This weak upward move stalled by noon and we drifted sideways for an hour before making fresh lows before 2pm. A rally during the 3pm hour formed another bullish price/RSI divergence but we have yet to see a bullish price flip to confirm the sequential buy signal. The session ended with another touch of new lows although the bulls did manage to close above the TD Support line at 1279.20.
In today's session I will be watching for a bullish price flip to confirm the TD Sequential buy countdown. Such an event with bullish price/RSI divergence in place should lead to at least a rally attempt. This price flip must happen before a qualified break of the bullish risk level of 1262.93.
Bottom Line: The allocation mix meter is at +50%. My near term scenario has the current decline ending shortly (within the next three sessions) 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.
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