SPX Monthly - August 2011

     I am making good progress on recovering from a major computer crash. To get back into the swing of things, here is a quick update to the monthly chart.
     It was quite a volatile month! It also nicely shows why I follow the moving averages I do. The low of the month was nearly identical to the medium (blue) moving average and the close nearly identical with the long (green) moving average. Beyond that interesting point I can only say that this chart is currently bearish - which occurred when the Beta-pulse low at 1249.05 was broken. We are now in the downward moving X-pulse; the delta high occurring at the May high. This price pulse bearish development comes after the June price flip that cemented the TD Combo sell countdown in Februray. Note that this was also the first price flip after a sell setup bar #9 in May.
     Going forward there are a couple of things to watch for:
     (1) Will the decline make a qualified and confirmed break of TDST Support at 1049.33? After a Combo signal this should happen if the trend has really changed. Otherwise we are just in a correction to a larger uptrend.
     (2) Will the RSI hold above the zone reserved for bull market support (38-42)? As in (1) above, a break of this zone would confirm a trend change. Otherwise we are just in a correction of a larger uptrend.
    (3) Will the long and short (red) moving averages act as resistance?
    (4) Will the Supply Line (downsloping red dashed line) act as 'ultimate' resistance? The price pulse theory says this market is bearish unless the delta pulse high is broken.
     Bottom Line: in my asset allocation work this time frame is on a "sell" signal. Only the quarterly and daily charts are positive at this point and so the allocation mix meter is at 25%.
     Back to the daily chart tomorrow.