Using the same criteria as that used to validate a TDST break, the TD Combo 13 “sell” signal (noted in red) has now been invalidated on this chart by the price break through the horizontal cyan line. The aggressive sequential 13 countdown bar (shown in gold) is still active since it has a higher “stop loss” level of 1717.68. The traditional sequential countdown is now on bar 11 (green).
Additionally, the technicals associated with this chart remain as last week: not promising for the longer run. Note that even though price is now at its highest closing level, both the RSI (top pane) and Composite Index (middle pane) are not confirming. Of course, a continued rally may work off these divergences. We’ll have to see if that happens before price turns down again. Also, the previous divergences have not stopped the bulls.
Bottom Line: I have been thinking that the May high will hold and I have been proven wrong. I still believe that the risk of being a long-term equities investor here is extremely high. Approaching a countdown 13 with bearish technicals is one reason. A twist on TD D-Wave is another reason and that will be the subject of my next few posts.
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