SPX Daily Chart

     Since the late November low the cash SP500 has seen two completed sell setups on the daily chart. The first resulted in only a minor pullback and the second in a brief consolidation. To start 2011 we had a TD Combo bar 13 print. After such an event the idea is to look for a reaction within 13 bars, and so we have until later next week until that time period is up. Meanwhile, the associated risk level is just shy of 1295.
     Both the weekly and daily charts are on TD Combo bar 13 situations but no action is warranted - yet - since the price pulse on both levels has failed to signal confirmation. We will update the weekly chart on Monday.

Short Term Price Pulse

     The short-term price pulse is shown on the daily chart of the cash SP500 via the dark blue labels. Based on yesterday's post we are interested in whether this chart is confirming that a break may be imminent in the intermediate beta-x trendline just under the market. The answer, as of today, is 'No.'
     The short-term beta pulse was very short (in time) and shallow (in price) and bounced off the intermediate beta-x trendline. The short-term delta pulse is now underway. Tomorrow I will present the daily DeMark chart.

SPX Weekly Chart

  As shown yesterday the intermediate beta-x trendline is being monitored for a possible break. Such a break, at the very least, would warn of a retracement towards the medium term beta-x trendline. With this information in mind let's take a look at the DeMark weekly chat from the July low.
     After reaching a completed Sell Setup on November 5 there ensued a typical four price bar correction followed by a resumption of the uptrend. Right at the end of the year a TD Combo bar 13 was printed - a possible sell point. The cyan horizontal line at 1273.72 is the risk level associated with this sell point. There are numerous methodologies on how to actually trigger a sell once bar 13 has occurred. One is to act on the break of the aforementioned beta-x trendline (which has not happened yet) or to take action if the daily chart confirms that a break is imminent. I will take a look at the short-term price pulse tomorrow.

Intermediate Price Pulse

Today's chart shows four levels of the price pulse. On the long term level we are in an alpha pulse up from the 2009 low. On the medium-long level we are in the delta pulse up after completing alpha and beta. The strong uptrend from the 2009 low is defined at the medium level by the beta-z trendline.
    And so, from the July 2010 low we are in both a medium-long delta pulse and a medium level alpha pulse. We can get an insight as to how close we are to completing that alpha pulse by looking at the intermediate level pulses which are shown in cyan. Once again a vigorous uptrend is shown since the current y pulse has exceeded the delta pulse high. In this situation the beta-x trendline should be monitored; and you can see that we are climbing that trendline now.
     A valid break of the intermediate beta-x trendline would be a warning that the medium level alpha pulse is over. What all of this means in a practical sense depends on your trading style. At the very least it would warn to look for a retracement towards the medium term beta-x trendline.
     The intermediate level price pulse analysis should be complemented with the weekly DeMark chart and I will show that tomorrow.

SPX Monthly Chart

     The monthly chart of the cash SP500 shows that a TD Buy Setup completed in February of 2009. The subsequent rally saw a consolidation following the TD Sell Setup nearly a year later. The most significant item of note currently is that TD Combo bar #11 was made last month. Like Sequential, a sell signal is possible after reaching a count of 13 - which could come as early as the end of February.
     With the medium price pulse in an uptrend (see last post) there is no immediate reason to be concerned about the rally (and any long positions) from the 2009 low. We will look to see whether there are any warning signs on the intermediate price pulse chart tomorrow.