SPX Daily Chart - 12 July 2011

     The cash SP500 reached the short (red) moving average yesterday morning while recording a buy setup on the hourly chart. This provided support until the last hour of the day and we closed below both the short and long (green) moving averages. If these moving averages can't hold in the first hour of trading today then the medium (blue; about 1303) moving average is the next support level to watch. The medium moving average is also at this level on the weekly chart.
     From a price pulse point of view, the daily chart has just completed an alpha pulse in a bearish pattern. This means the pattern can not turn bullish unless we complete the current beta pulse above the z bottom and then go on to exceed the alpha high.
     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.