SPX Daily Chart - 10 March 2011

     The cash SP500 broke to the downside yesterday and surely is threatening to produce a weekly price flip (if we close today below 1329.15).
     The next downside projection is labeled 2 and is TDST support at 1286.12. Below that is a cluster of support targets between 1265-70. Also noted is that a 100% projection of the move down from 2/18 - 2/24 aligns with that area.
     Bottom Line: A close below 1329.15 will turn the weekly chart bearish and lower my Timeframe Mix to a +50% reading.

SPX Daily Chart - 9 March 2011

     Today's daily chart contains a real time example of "Double Inside Bars", as both Tuesday and Wednesday formed inside price bars. Some technicians watch for this pattern since it oftne leads to sizeable moves. As Brett Steenbarger noted in his blog back in 2006, this pattern seems to be followed by upside breakouts in bull markets and downside breakouts in bear markets. His conclusion was to use the breakout as a trend indicator.
     Over the past few days I've had my own preference for an indication of which way the market would break: either a break of the downsloping trendline or a move below 1302.58. Today I want to change the downside breakout indicator from a fixed price to the upsloping dashed green line. Intraday moves either above the supply (red) line at 1325.73 or below the demand (green) line at 1305.40 would be qualified today.
     Bottom Line: Although I watch technical developments day to day my own preferred investing signals develop slowly and are not geared towards short-term trading. For me, all the charts are bullish right now except for the daily and so my Timeframe Mix is at +75%. This value ranges from 0 to 100 and gives me a long-term view as to what my cash allocation might be towards the equity markets.

SPX Daily Chart - 8 March 2011

SPX Daily Chart - 7 March 2011

     Prices have been contracting in "triangle like" fashion over the past two weeks, and have been bouncing between the short (red) and medium (blue) moving averages as well. It certainly feels as if the market is at a decision point: Either break up or break down.
     A break down would be indicated on any move below 1302.58 and target objective #2 at TDST support (1286.12). A break out to the upside would be signaled by a move through the downsloping red trendline and most likely be followed by a move to new highs. Recall that the daily chart's risk level is at 1345.5 (dashed horizontal blue line) and is associated with the last TD Sell Setup recorded on February 11. A qualified break of that level would turn the daily chart back to being bullish.
     If I had to guess which way we break it would be up, simply because of the recent bullish divergence between the RSI and Composite index since March began as shown on today's chart.
     Bottom Line: All charts bullish except for the daily and so the Timeframe Mix is at +75%. This value ranges from 0 to 100 and gives me a long-term cash allocation view of the equity markets.

SPX Weekly Chart - 4 Mar 2011

     The weekly chart (shown above) formed an 'inside' price bar last week as the market continues to hesitate after completing a sequential 13 and a possible five wave impulse pattern from the July low. However, until we see a price flip I can't label this chart as bearish. This week a close on Friday under 1329.15 (horizontal purple line) is required in order to get that flip.
     On the other hand, any rally this week that prints above 1355.43 (the horizontal blue line labeled 100%) would put the sequential 13 on hold. In fact, there is evidence from my price pulse timing model that a move to new highs is likely.
     Bottom Line: The weekly chart remains in a bullish position.