The cash SP500 confirmed the break of the TD supply line (upsloping dashed green line) yesterday making the immediate target the TD Trend Factor shown on the chart at the 1281.06 level.
On the hourly chart we began Thursday by completing a TD Buy Setup, but this only resulted in a bounce lasting a couple of hours before we sold off into the close. We ended the day testing TDST support at the 1300.01 level. Today the battle will continue to be over the July 18 low (1295.92) since a break of this level 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 still an opportunity for them on the hourly chart. We have not yet confirmed the break of hourly TDST support nor broken the risk level of 1297.35 associated with the TD Buy Setup we completed at 10am Thursday.
Also of extreme interest to me is what the RSI (top pane) will do here. Note that this indicator signaled a bear market from the May 2 high when it dipped below support on June 6. It then failed to clear resistance during the rally into the July 7 high warning that this move was a bear market rally. Now we are once again approaching the support level. Let's see if it can hold or not. I vote no.
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.
3 comments:
Thank you for the excellent analysis. Do you see if there may be a shorting opportunity at a higher level? And if you don't mind, please take a look at GLD and FXE some time. Very curious of macro view of yours.
Have a great weekend!
Pardon me for the redundant request: I wasn't aware of your response to my comment on 7/25. But still wonder if better shorting opp will come. It is very stupid of me totally missing this down move )-:
As for Tony Plummer's book "Forecasting Financial Markets" I found no new books available. Which edition do you have?
Thanks again Fox!!!
Hi. As per my July monthly review ... I think that any rally over the next couple of months would very likely be a shorting opportunity accompanied by a sequential sell signal.
I don't follow the currency markets except for the dollar index. However; I do agree with you that an update of GLD is warranted and I hope to do that over the next week or so.
Cheers!
Sax
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