Triangle Doesn't Appear; Daily Chart Remains Bearish

There is now no chance of a final fifth wave push higher. The fifth wave is in at the August 2 high which coincided with a TD Combo 13. And so the daily chart remains bearish.

The question now revolves around the significance of the August 2 high. Is it the end of the rally from the 2009 low? Does it mark the completion of a “D” wave in an expanding triangle from the year 2000? Or is it just a resting point on the way to higher highs? I am quite convinced that the August 2 top ends the rally from the June 24 low. Does it also mark the end of the trending impulse wave from the November 2012 low? From the daily chart itself there are a few ways to try and answer this question.

1) Price Pulses. The next trendline of interest is the much larger Beta – X line shown in orange on the chart. A close beneath this line will raise the chances significantly that the trending impulse pattern from last November is complete.

2) RSI. Two readings below 38 will also point to the August high as completing the pattern from November 2012. The RSI is currently at 40.8.

Another way to gauge the August 2 high is with charts of higher timeframes. I will look at the new weekly chart this weekend. Remember that a close today less than 1692.09 will flip this chart bearish!

Now or Never for Triangle Scenario

And so the daily chart remains bearish. If there is to be one last, brief pop to the upside it is now or never as it looks like the contracting triangle possibility is about played out. Keep in mind that any such fifth wave up would probably complete the TD Sequential countdown which has been stuck on bar #11 since August 2. Not only is time running out, but the short-term bullish technicals that existed at the beginning of the week (see August 13th posting) have evaporated. In sum the upside, at best, continues to look very limited.

Just Marking TIme?

For reasons recently stated (see posting of 8/8/13 for example) the daily chart is now bearish. However, there remains the possibility of another rally from these levels which would fall under the fourth wave contracting triangle idea as discussed in the last daily posting. epicted in the attached chart. If correct it means that one last and most likely short, fifth wave up is required. Keep in mind that any such thrust up would probably complete the TD Sequential countdown which has been stuck on bar #11 since August 2.

This short-term bullish option is enhanced by the composite index (middle pane) failing to make a new low yesterday with the RSI (top pane) and price.

The shortest degree (level I) price pulses I keep (not shown) will turn bullish on a move above 1700.18. At Level II we now have a Y-pulse confirmed complete at the August 2 high. A move above 1700.18 will confirm the Z-pulse is in at yesterday’s low. It would then still take a new high to turn Level II bullish but the upside looks very limited.

Finally … is the market just marking time? This Friday marks a very important Gann timing date. A taste … we have now moved 232 weeks from the 2009 low. Of course 233 is a Fibonacci number. But where is it on the Square of Nine?

Weekly Chart Just Needs a Price Flip

The technicals associated with this chart continue to be supportive of potential price exhaustion since we now have an actual bearish divergence between price and the RSI (top pane). This is particularly of interest since we have a TD Sequential countdown bar #13 in place. Now I am waiting for a price flip to trigger a “sell” signal. In this case a close next week below 1692.09 will do the trick. To be balanced we should also point out the associated “stop loss” level of 1737.48.

The Beta-X trendline is shown in blue. This is used as an aggressive “sell” trigger in the price pulse investing scheme. I believe we are very close to completing an Alpha pulse (at the blue color level). If so, the conservative “sell” signal would be for a close below the previous Z pulse low. This is also the low that must be broken for TD D-Wave to show the Triple Three count presented in the recent series of postings as complete. Please note that the count shown on the chart is not that D-Wave count but instead is based heavily on my price pulse work.

With the daily chart now bearish, the weekly close to flipping that way, and potential exhaustion showing up at the monthly levels one should be ready to move even further to the sidelines as far as the cash S&P500 goes.