After reaching and validating an upside break of the Trend Factor (TF) target at 1338.12, the cash SP500 then broke above TDST resistance at 1345.20 (red horizontal dashed line). The break was not qualified (I am using the rules outlined in Jason Perl's book) and has been followed by a 40 point decline over two days. Also note that the high on July 7 was accompanied by an RSI peak in the area reserved for bear market resistance. The possibility that the move off the mid-June low is complete and was a counter-trend rally must be respected.
The low yesterday was at the long (green) moving average. 1314-1316 is the current support level. If that can't hold then 1303 needs to be watched.
Bottom Line: The allocation mix meter is at +50%. I remain quite concerned that the rally high from the 2009 low was made on May 2. As such, I will be watching closely for any sign of a potential top as we move forward. In particular, two events would be very bearish: An outright break below 1249.05 or a failed retest of the July 7 high.
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