It Looks Like the Retest has Begun

The cash S&P500 formed a downtrending day on Tuesday and it appears as though the retest of the January 23 low has begun. Please note that the retest does not have to be done in one fell swoop. There can be bounces on the way down.

There are a number of things I will be watching as the retest unfolds. Most importantly will be the weekly chart. Will it give a technical “buy” signal on the retest? This question is even more important to me then whether or not we get a new low. My developing trading system will only allow a long trade to be established under a weekly “buy” signal.

On a shorter-term basis the first thing I want to see is whether we can break below the January 28 low of 1322.26. That is the first level needed at this point to confirm that the Y-pulse high is in on the “intermediate” time frame.

On today’s chart I have entered the Fibonacci price levels to watch from three different time frames of the price pulse. Interestingly we closed right at the first cluster around the 1335 level. The next cluster is just below 1300 and then again at the January 23 low.