Another Attempt at the Beta-X Trendline and TDST Support

Although we did not have a qualified break of the Beta-X trendline on Thursday, we did on Friday. We also dipped below TDST support (see chart of the daily cash SP500) but that was NOT a qualified break. That is, we can say that the cash SP500 has so far held support.

So how about that qualified break of the Beta- X trendline? Recall that nullifying the importance of the line is a two-step process. Step two requires confirmation of the qualified break  – which will NOT happen without a lower low on Monday. On top of that the RSI continues to hold the zone reserved for bull market support (38-42). Additionally, the Composite and Derivative Oscillator values are threatening to form bullish divergence with the RSI.

Conclusion? Another positive day on Monday could mean that at least a temporary low is in place and that a retest of the May high would not be unexpected. I will take a look at the weekly chart tomorrow to put the daily action into context.

A Qualified Break of the Beta - X Trendline?

On Thursday the Beta-X trendline was broken and the market ended just above TDST support (see chart of the daily cash SP500). Note the selloff occurred after hitting the Fibonacci 61.8% retracement level.

Did we have a qualified break of the Beta- X line? To answer that question I use the 3 criteria outlined on page 107 of Jason Perl’s book “Demark Indicators.” In this case we fail to meet any of the three conditions and conclude that we did not have a qualified break. That may change today, but so far we can’t say that that important line has broken.

On top of that the RSI stands at 39.5 today – in the zone reserved for bull market support. Additionally, the Composite and Derivative Oscillator values are threatening to form bullish divergence with the RSI.

Conclusion? A snap back rally today could mean that at least a temporary low is in place (TDST Support held!) and that a retest of the May high would not be unexpected. Therefore, rally today and the question goes back to the bulls – ‘can you keep the rally alive?’

A Weekly Price Flip

The most significant development since my last posting was the price flip on the weekly chart. This triggered the pending TD Combo sell signal (see posting of 3 June) AND the more recent TD Aggressive Sequential sell signal made the week of May 31. With the weekly now on a “sell” my exposure to equities has been duly lightened.

As far as the daily chart goes (pictured above) not much has changed. We remain on bar 12 of an aggressive TD Sequential sell countdown. Please note that bar 13 can only form after a high greater than 1660.06. We also held above the Beta-X trendline on June 13 and TDST support has yet to be challenged.