SPX Daily Chart - 28 April 2011

     In retrospect I am not unpleased with taking some cash off the table during the time that the daily chart was in bearish mode (from February 22 to April 27). However, one of the things I was wanting to find out during the correction was something I wrote about in late February when discussing the monthly chart:
     "One thing I will be tracking closely is the notion put forward by Connie Brown that signals 'roll downhill'. The implication being that weekly and daily signals are suspect without the higher timeframe signal in place."  I now put forth the hypothesis that the just experienced correction never went deeper (by becoming a change in trend on the weekly chart) because we never had a signal on the monthly chart.
     I will revisit this topic beginning with my post on Monday which will be on the new monthly chart for April.
     Bottom Line:  The allocation mix meter has been raised to +75%. With the RSI breaking above the zone reserved for resistance in bear market rallies we have confirmation that the daily trend is up. As far as price goes, the first TD Trend Factor target off the March low is at 1391.7 and is marked on the chart. 1391 is also 240 degrees up from the April 18 low.

SPX Daily Chart - 27 April 2011

     The cash SP500 has made a qualified break of the 1341.59 line and so the daily chart is once again in a bullish position. In review the daily chart was in bearish mode from February 22 to April 27. The allocation mix meter is now raised to +75%. The market is now likely to move higher (in time) until, at a minimum, a complete sequential countdown has formed. Yesterday was bar #8 of a required 13. As far as price goes, the first TD Trend Factor target off the March low is at 1391.7 and is marked on the chart. 1391 is also 240 degrees up from the April 18 low. Still watching to see whether the RSI can get above the area reserved for bear market rally resistance (parallel red lines).

SPX Daily Chart - 26 April 2011

     The market broke above both the supply line and overhead resistance yesterday while working off its divergence with the RSI indicator. Confirmation today of the break above 1341.59 will turn the daily chart bullish and move the allocation mix to +75%. Still watching to see whether the RSI can get above the area reserved for bear market rally resistance (parallel red lines).

SPX Daily Chart - 25 April 2011

     After reaching our target at about 1337.5 (marked on the chart in brown) the market has hesitated. However, hesitation is not a reversal. The close was well above the low and further gains can not be ruled out. The next target area is between 1341.59 and 1345.50 (two horizontal blue lines on the chart). Just above the market is the current TD Supply Line (downsloping dashed red line). A break above that line today would be bullish.
     Call me stubborn but I still think the bulls must prove their case here; particularly since a bearish divergence between price and the RSI was produced yesterday.
     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 remains at +50%.

SPX Weekly Chart - 15 Apr 2011

     After registering a countdown '13' bar the cash SP500 has not exceeded that high for nine weeks, moving essentially sideways as the standard deviation channel (in purple) shows. Recall that if the countdown is going to lead to a change in trend it should become apparent within twelve bars and so time is running out. There is nothing that says a completed countdown must result in a change in trend, and so all we get may be a sideways consolidation.
    It is of note that during the run up from the March 18 low to the 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 at the early April high as price did. The RSI then dropped down to 62 and has now returned into that same resistance area. 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 back below the 63 level. Such an event would signal a bearish divergence between the two points indicated by the arrows.
     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 still on the bulls here.They were unable to push price above that supply line last week. For this week the only way to qualify an upside break through that line will be to open Monday at or above 1337.49.
     Bottom Line: The weekly chart continues in a bearish position and will need a confirmed break of the 1363.53 risk level to regain a bullish position.