After consolidating at resistance on Wednesday, Thursday saw the cash SP500 move sharply higher to the next resistance area created by both daily (1345.20) and hourly (1343.78) TDST levels. Will this resistance hold or not?
On both a daily and hourly basis we can say that the charts broke above their respective lines in a qualified manner. Let's look at both starting with the hourly. The break above the TDST line was not confirmed on an hourly basis and another sell setup completed at 3pm. This setup has not experienced a price flip and must hit 1355.35 (before such a flip occurs) if it is to become the active setup as far as sequential goes. In any event, this indicates that the market is vulnerable to a reversal or correction during the first half of trading today; particularly since we have a negative price/RSI divergence in place on the hourly chart.
On the daily chart the break of the TDST line (horizontal, dashed red line on the chart) will not be confirmed today if we open below the line or fail to exceed yesterday's high. I would interpret such a failure as a warning that the delta pulse is running out of steam; and I favor this scenario.
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.
No comments:
Post a Comment