SPX Daily Chart - 20 April 2011

     With price reaching towards two important resistance areas we will learn a lot about the strength of this market by seeing how it reacts when reaching them. The first upside target is based on the qualified break of the TD Supply Line (downsloping red dashed line) and lies at about 1337.5 (marked on the chart in brown). The second target area is between 1341.59 and 1345.50 (two horizontal blue lines on the chart).
     Price Pulse. On April 11th I noted that my price pulse work indicated that the 'y' pulse had completed. It is now clear that the 'z' pulse in the sequence finished at the April 18th low. Since the 'z' pulse low was higher than the 'x' pulse low the implication is that we will exceed the April 8 high unless the higher degree pulse turns.
     Bottom Line: The bulls are once again attempting to break above the February 18 high. But, until we get a qualified break of 1341.59, the daily chart remains in bearish mode (which it has since Feb.22). My allocation mix meter remains at +50%.

SPX Daily Chart - 19 April 2011

     A couple of developments on the daily chart. First off, price has held the long term (green) moving average. While holding this support a bullish divergence has formed between the RSI (top panel) and the Composite Index (second pane). With this technical signal in place it does not surprise me to see a pop here. The question is whether it is the start of a new rally phase.
     If I assume that the TD Supply Line (downsloping red dashed line) will be qualified at the open today, I can make a projection to about 1337.5 which is marked on the chart in brown. What makes me think a triple top in that area is possible is the REI as shown in third pane. This indicator has been in an oversold position for more than six sessions. When this occurs the market usually needs to pop up, relieve the oversold condition, and then come back into an oversold position for less than six periods before any rally can get underway in earnest.
     In any event, my parameters for turning bullish on this time frame have been set for quite a while now - a qualified break of 1341.59.
     Bottom Line: The daily chart remains in a bearish mode (since Feb.22) with my allocation mix meter at a +50% reading.

SPX Daily Chart - 18 April 2011

     The cash SP500 was unable to get above the 1324-26 area on Friday and has since sold off, reaching the long (green) moving average. If the bulls can not hold this support level then the next target down is TDST Support at 1279.20.
Bottom Line: The daily chart remains in a bearish mode (since Feb.22) with my allocation mix meter at a +50% reading. The chart would turn bullish with a qualified break of 1341.59.

SPX Weekly Chart - 15 Apr 2011

     Actually I don't have much new to say about this chart. After registering a countdown 13 bar the cash SP500 has not exceeded that high for eight weeks. However; we are still well above TD Support at 1219.5 and, as the standard deviation channel (in purple) shows, have been moving essentially sideways and have yet to see a change in trend
    It is of note that during the run up from the March 18 low (a retest of the February high) the RSI (top pane) moved right into the area reserved for resistance (parallel red lines) in bear markets and then failed. The RSI has NOT signaled a bear trend on this chart yet, but often times such a signal will begin with a reversal in this area. The bears now want to see price decline with the RSI slipping below the point marked on the chart.
     Of course there are always two sides to the story. Bulls will want to see the TD Supply line (in red) broken with the RSI pushing up above the 67 level. But I think the burden is on the bulls here.
     Bottom Line: The weekly chart continues in a bearish position and will need a confirmed break of the 1363.53 risk level to return to a bullish position.