After attacking resistance during the sessions of July 21-23, the bulls failed and were turned back. The initial decline from the failed resistance zone was mild but picked up steam yesterday. Price of the cash SP500 not only formed another downtrending price bar but also broke through the TD supply line (upsloping dashed green line) in a qualified manner. If the break of that line is confirmed today then the immediate target is the TD Trend Factor shown on the chart at the 1281.06 level.
From here the bulls don't want to see the July 18 low (1295.92) taken out since this would confirm the level 2 (which aligns with the weekly chart) price pulse pattern we've been following (see last weekly chart update for details) and mean that the Z pulse is underway. If the bulls want to defend the July 18 low there is an opportunity for them on the hourly chart. We potentially can complete a TD Buy Setup at 10am this morning very near current TDST support at the 1300.01 level.
Bottom Line: The allocation mix meter remains 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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