In last week's update it looked like the battle would be over the Trend Factor target (1265.68) and the long term trendline, and that seems to be the case. We broke below each target last week in a qualified manner but failed to end the week below either. This is an indication that the bulls may be able to hold, but only an indication. To invalidate last week's break the bulls are going to have to hold here again this week. At the very least the bulls will want to keep price above last week's low. They will also want the weekly RSI to turn up without dropping below the bull market support zone (38-42). So far it has held, falling to 44.7 last week. However, even if the bulls are successful, the longer term picture is still dicey. Without (at least) a sequential buy setup appearing (which would take at least three more weeks) it looks like any bullish counter attack will be just that - a counter trend rally within a larger bearish decline.
Bottom Line: The allocation meter is at +50%. If the long term trendline and the Trend factor target are not enough to support the market then the March low is the next target. Any break below the March low of 1249.05 will cause me to lighten my position further as the allocation meter would fall to +25%.
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