A Bevy Of DeMark Indicators

Little has changed in the overall picture since my post of last Friday morning. An uptrending day moved the cash S&P500 right to the mentioned Gann target of 876. “Price Pulse (PP) Theory” continues on a “buy” signal unless the Beta – Z trendline (at 849.52 today) is violated (see chart from last Friday). As before, I refuse to get too bearish until I see a break in the price pulse trend, which right now requires a dip below 835.58.

Today’s chart shows that a TD (Tom DeMark) Combo “sell” signal has been reached! This indicator was developed to show when price exhaustion has been reached within a move; in this case it comes within our Elliott Diagonal Triangle (wedge) pattern. Aggressive traders can go short with appropriate stops (890.39 if you add Friday’s true range to Friday’s high). More conservative traders can use other entry techniques. For instance, TD Camouflage, TD Clop, TD Clopwin, TD Open and TD Trap have not yet generated sell signals yet.

The chart also shows the two most current Level 1 TD Lines. The supply line (in red) was broken but not qualified. The demand line (in green) sits at 845.59 and will be qualified if broken today. Breaking this demand line would be one place to go short. The target price on a break calculates out to 812.22. Finally, please note the DeMark REI indicator is still on a sell (generated last Tuesday; the stop loss being 883.27 which has not been hit yet).

Let’s see if we start down today.

Diagonal Triangle (Wedge) Completing?

Going into options expiration day the cash S&P500 went back into rally mode, making another uptrending price bar on Thursday. This puts the market back into (at least for the moment) a bullish position. It is now apparent that the Z pulse completed at Wednesday’s low and that an Alpha pulse is underway. The “Price Pulse (PP) Theory” is now on a “buy” signal unless the Beta – Z trendline (at 844.87 today) is violated. As before, I refuse to get too bearish until I see a break in the price pulse trend, which right now requires a break below 835.58.

Please note that the Level 2 Price Pulse (green labels) is about to complete a Delta pulse to the upside. This Delta pulse is forming an Elliott Diagonal Triangle (wedge) pattern and so tight stops (on long positions) are called for.

Targets for the end of the wedge are shown on today’s chart. 876 is a Gann target from the March 6 low and 882 to 885 is a Fibonacci cluster. I also note that the Level 2 TD (Tom DeMark) supply line that was broken yesterday was not qualified. This supports the idea of limited upside here. The last TD Anti-Differential remains the down arrow at Monday’s high and the DeMark REI indicator is still on a sell (generated Tuesday).