Although it wasn’t by much, the cash SP500 index slipped below the below the Price Pulse Confirmation Line (horizontal red dashed line at 1623.09) yesterday. This was the second and final step needed to show that the entire move from the April 18th low is a complete Short-Term price pulse/wave. It is a five segment Trending Pattern and is either ALL or PART of the Intermediate Term pulse/wave that also started on April 18th. In wave terminology, the short-term wave is either all of intermediate term wave 5 or just the first part - wave 1 of 5.
Of course the answer to the question – all of five or one of five – is critical to the future course of prices and that is one reason why I wanted to look at the technical status of both the monthly and weekly charts over the last few postings. Their potential weakness leads me to favor the more bearish scenario that the rally from the 2009 low is complete. Currently, the pulses themselves will only confirm that opinion if price were to drop below the April low. For me, as an investor and not a trader, it is time to be very wary of equities.
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