The breakout from the contracting triangle continues. The uptrending price bar formed Monday was number seven of a possible TD Sequential “sell” and with 13 bars required at a minimum before the signal, we may have a week or more of upside still to come.
On the daily chart we must now look to see how the market acts as it moves towards the next upside target in the 970’s. Since the weekly TD Sell setup has now been perfected it is prudent to begin a closer watch of the technical indicators. For me that means the RSI, Composite Index and Derivative Oscillator, as I find them a nice complement to the price exhaustion work of Tom DeMark.
It also means watching the price pulses (shown today) which are all bullish as of this morning. At the lowest (BLUE) level we have just started a new cycle and are moving upward in Alpha. A sell signal can only be generated on this level right now with a move back below 887.60. At the GREEN level the market showed its bullish intentions when the recent Beta pulse failed to go below 878.94. We are now in a Delta pulse on both the GREEN and RED levels. A sell signal can only be generated on these levels right now with a move back below 879.61. Since I don’t expect outright sell signals here I need to be attentive to “indications” of weakness in the patterns combined with the technical indicators mentioned above. Let us see what today brings.
I am not at all satisfied with the mechanical (experimental) trading system I was playing with and so will go back to the lab bench with it.
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