We saw a downtrending day on Thursday that reached for the May 15 low after breaking below the current TD Demand line. As mentioned yesterday, that demand line break was not qualified and; true to form, the market was able to close back above it. For today the only way to qualify that line is to open under it (885.36). Such an open would trigger a trend continuation trade (see below for details).
The strength of yesterday’s decline was enough to favor the interpretation that a Level 1 Z pulse is underway; especially since the Level 2 Beta – X trendline (see May 19 posting for more information) has now been broken decisively. This event, combined with a further decline below 878.94 today would enable us to lower the stop on the open experimental trade position (see below for details).
A new TD Supply line has been formed and sits at 923.20 today. Also note that the Swing Chart (the orange lines that move in a “step-wise” fashion) is on the verge of making a lower high for the first time since this rally began in March.
Well …. It is a Friday just before a three day weekend so respect the bulls today! Have a great holiday weekend. I will post the weekly review either Sunday or Monday morning.
The experimental trade position remains short from 897.34; stop & reverse currently at 930.17. Lower that stop & reverse to 924.61 on a move below 878.94 today. A trend-continuation short trade would be taken today ONLY if the open is less than 885.36. If taken the initial stop would be placed at 900.43. Calculated price objective: 827.71.
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