The fight continues over whether the consolidation/bounce is over in the cash SP500. The price action over the last two sessions has confirmed that the alpha-pulse ended at the August 31 high. The price pulse model says that the bulls have most likely failed if we break below the August 22 low of 1121.09.
If you are bullish near term (like I am) the good news is that the intraday break of the TD Demand line yesterday was unqualified - demand did come into the market at that level. Now we need to see some follow through. Another thing to worry about (besides seeing follow through) is the strong resistance forming in the 1185-1194 area composed of the medium (blue) and short (red) moving averages as well as the TD Supply line.
I think the fight today will again be over: 1) keeping the daily RSI above the 38 level; and 2) the TD Demand level (upsloping dashed green line).
Bottom Line: Until further evidence develops or we break 1121.09 I think that the bullish potential over the near term should be respected. My mechanical allocation mix meter is at +50%.
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