SPX Daily Chart - 21 July 2011

     After consolidating at resistance on Wednesday, Thursday saw the cash SP500 move sharply higher to the next resistance area created by both daily (1345.20) and hourly (1343.78) TDST levels. Will this resistance hold or not?
     On both a daily and hourly basis we can say that the charts broke above their respective lines in a qualified manner. Let's look at both starting with the hourly. The break above the TDST line was not confirmed on an hourly basis and another sell setup completed at 3pm. This setup has not experienced a price flip and must hit 1355.35 (before such a flip occurs) if it is to become the active setup as far as sequential goes. In any event, this indicates that the market is vulnerable to a reversal or correction during the first half of trading today; particularly since we have a negative price/RSI divergence in place on the hourly chart.
     On the daily chart the break of the TDST line (horizontal, dashed red line on the chart) will not be confirmed today if we open below the line or fail to exceed yesterday's high. I would interpret such a failure as a warning that the delta pulse is running out of steam; and I favor this scenario.
     Bottom Line: The allocation mix meter is at +50%. I remain quite concerned that the rally high from the 2009 low was made on May 2. As such, I will be watching closely for confirmation that the July 7th high was the top of a counter trend rally.

SPX Daily Chart - 20 July 2011

     Wednesday's price action in the cash SP500 is best described as 'drawing a line' at the resistance area created by the short (red) moving average on the daily chart and the hourly TDST resistance level of 1326.88. The poke above the daily short moving average was confirmed by the price action yesterday but the poke above hourly TDST resistance was not. A true stand off between the bulls and bears!
     If any thing is clear at this moment it is these four levels of support and resistance: 1343.78 to 1345.2; 1326.88; 1317.15 to 1318.65; and 1300 to 1306.  Even if we start lower today I don't necessarily think that the recent run up from Monday's low is over. If that is the case I would expect the 1317-18 level to hold. The larger scenario is provided by the price pulse picture. The daily chart is now most likely in a delta pulse of a (still) bearish pattern. If beta bottomed at Monday's low the pattern can not be said to be bullish unless we then go on to exceed the alpha high (which I doubt).
    Perhaps the best way to end this posting is to repeat words from the weekly post: "At this point I think we will see; when all is said and done, generally sideways movement over the next couple of weeks."
     Bottom Line: The allocation mix meter is at +50%. I remain quite concerned that the rally high from the 2009 low was made on May 2. As such, I will be watching closely for confirmation that the July 7th high was the top of a counter trend rally.

SPX Daily Chart - 19 July 2011

     After holding support at the medium (blue) moving average on Monday, the cash SP500 moved directly to the short (red) moving average yesterday; closing above it in a qualified manner. Will today see confirmation of that break? We are at interesting point since the challenge of the daily short moving average is occurring where we have TDST resistance (on the hourly chart) at 1326.88 - which is just above where we closed (1326.73).
     The verdict on whether this hourly resistance and daily moving average will hold the bulls here will be given very early in today's session. However; for the more important hourly sequential buy countdown (which is still stuck on bar #11)  the 1343.78 level is of extreme importance and so I don't necessarily think that the decline from the July 7 high is done if resistance doesn't hold this morning. In fact, from a price pulse point of view, the daily chart is now most likely in a delta pulse of a (still) bearish pattern. This would support the resistance failing this morning. But note that if beta bottomed at Monday's low the pattern is still not bullish unless we then go on to exceed the alpha high (which is what I am doubting the bulls will be able to do).
     That 1343.78 level just mentioned is associated with the still active TDST resistance level on the daily chart at 1345.20. If this resistance area is not breached (in a qualified and confirmed manner) then i expect that the current rally from Monday's low will run out of steam and be followed by another drive down towards the Trend Factor target of 1281.06 (shown on the chart).
     Bottom Line: The allocation mix meter is at +50%. I remain quite concerned that the rally high from the 2009 low was made on May 2. As such, I will be watching closely for confirmation that the July 7th high was the top of a counter trend rally.

SPX Daily Chart - 18 July 2011

     Starting from the long (green) moving average at the open, the cash SP500 moved steadily downward to break below the medium (blue) moving average by early afternoon. From there a rally lasted into the close and we finished above the blue moving average. The close yesterday was virtually identical with the weekly medium moving average. Yesterday I noted how this level would be important this week, but we still have four more days to go!
     On the hourly chart, I continue to watch a sequential buy countdown unfold. We hit bar #11 before the afternoon rally. Current TDST resistance on this time frame is at 1326.88 which is close to the daily short (red) moving average. The daily price pulse chart shows 1317.7 as an important point and so this area must be considered important resistance. However; for the hourly countdown, the 1343.78 level is of extreme importance and so don't think the decline is done if 1326.88 is broken. Because, if the 1343.78 level is not breached, I expect that any rally from here will run out of steam and be followed by another drive down towards the Trend Factor target of 1281.06 (shown on the chart).
     From a price pulse point of view, the daily chart is now in a beta pulse of a bearish pattern. The pattern can not turn bullish unless beta completes above the z bottom (which it is now threatening to do) and we then go on to exceed the alpha high (which I doubt).
     Bottom Line: The allocation mix meter is at +50%. I remain quite concerned that the rally high from the 2009 low was made on May 2. As such, I will be watching closely for confirmation that the July 7th high was the top of a counter trend rally.

SPX Weekly Chart - 15 July 2011

     On the weekly time frame my expectation of topping action continues unaltered. This week my main focus will be on how the cash SP500 interacts with the short (red) and medium (blue) moving averages. Will they provide support to the market? Or is it possible that the 'y' pulse rally is complete?
     Bottom Line: At this point I think we will see; when all is said and done, generally sideways movement over the next couple of weeks. At that point it may be time for the next directional move. The allocation meter is at +50%.