After bulling their way to just back over the Beta – Z trendline the cash S&P500 kissed the underside of that prior support line goodbye and the bears made their entrance. Prices ended near the lows of the session but ended up being classified as an uptrending day.
Although I still believe that the market has begun a downward move from last Friday’s high I can’t say I think we will go down hard and fast here. The 825-827 area is still our immediate downside target although we’ve already been there once. In fact, as of Wednesday’s close there is a 66% chance that the Beta pulse completed at Tuesday’s low. If that is the case we may even attempt to move higher again over the next couple of days with last Friday’s high as or bearish “do or die” point.
Unless we have a large gap opening to the downside this morning we will not qualify the new demand line (green sloping line) or the 826.94 target (horizontal blue line) should we hit them today. This argues that a choppy sideways to down market over the next two days is the best the bears can hope for.
Bottom Line: Looking for a retracement of the March 6 to April 17 rally that goes below 780.
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