Wednesday's price action in the cash SP500 is best described as 'drawing a line' at the resistance area created by the short (red) moving average on the daily chart and the hourly TDST resistance level of 1326.88. The poke above the daily short moving average was confirmed by the price action yesterday but the poke above hourly TDST resistance was not. A true stand off between the bulls and bears!
If any thing is clear at this moment it is these four levels of support and resistance: 1343.78 to 1345.2; 1326.88; 1317.15 to 1318.65; and 1300 to 1306. Even if we start lower today I don't necessarily think that the recent run up from Monday's low is over. If that is the case I would expect the 1317-18 level to hold. The larger scenario is provided by the price pulse picture. The daily chart is now most likely in a delta pulse of a (still) bearish pattern. If beta bottomed at Monday's low the pattern can not be said to be bullish unless we then go on to exceed the alpha high (which I doubt).
Perhaps the best way to end this posting is to repeat words from the weekly post: "At this point I think we will see; when all is said and done, generally sideways movement over the next couple of weeks."
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.
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