After hesitating at the short (red) and and long (green) moving averages Tuesday and Wednesday, the cash SP500 broke below them in a qualified manner yesterday. On the hourly chart, the price action on Tuesday and Wednesday can be seen as a consolidation and then short-lived upward bounce in response to a buy setup. Yesterday's decline broke below the support (risk) level associated with this setup in a qualified manner and was validated - an indication that the downtrend has resumed. As such, the medium (blue; about 1302) moving average is the next support level to watch on the daily chart. The weekly medium moving average is also at this level. I have also added the Trend Factor target of 1281.06 to the attached chart.
From a price pulse point of view, the daily chart is now in a beta pulse of a bearish pattern. The pattern can not turn bullish unless beta completes above the z bottom and we 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 confirmation that the July 7th high was the top of a counter-trend rally.
3 comments:
Very much like your TFA target here. What will be interesting to watch for swing traders is the point just below it at 1280.87. This where the recycle for the new hourly Set Up would cancel (more than 1.618) and revert to the previous Countdown if we get there in time. The recycle begins at 1298.27 if we get there. With this being Op Ex day I doubt that we will see that kind of move today. But then, this market is full of surprises.
Just a quick update to my own comment. That second Set Up flipped on the first hourly bar this morning, so there will be no recycle whatever happens here. Sorry I didn't mention that likelihood previously. Current count is still at 7 Sequential on the hourly.
Right you are; and I bet we both expect the countdown to reach a full 13.
Sax
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