There have been a couple of developments on the weekly chart since I last commented on it in the June 23rd posting. First, at that time (June 23rd) the break of the Beta-X trendline (see above chart) was not yet qualified. It was qualified the following week but immediately invalidated by the rally this past week. As a bear I want to see this break qualified and validated as we go forward. Do note, however, that the Beta-X trendline may now be acting as resistance to the price action.
A second development is that the TD “Buy” Setup count has reached 4. I use a Buy or Sell Setup count of 4 as a “swing” chart filter. The resulting swings are then used to determine the trend and are shown on the attached chart in orange. Thus the trend is now down from the May high.
These two developments keep me negative on the weekly chart at this time. The June 23rd posting explained the technical weakness (bearish divergence between the RSI and Composite Index; a TD Combo 13 sell signal and a TD Aggressive Sequential 13 sell signal) present in this chart; and none of that has changed.
Bottom Line: I believe the May high will hold and that we are in the initial stages of a new equity bear market. Any move above the May high will prove me wrong.
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