The sell setup reached on December 27 led to a brief cosolidation. Then, at the start of 2011, we had a TD Combo bar 13 print. The associated risk level (shown on the chart as the dashed horizontal cyan line) was calculated at that time as 1294.72. After a Combo 13 event the idea is to look for a reaction within 13 bars. This Tuesday, January 18, was the tenth bar and had a close above the risk level. Use of such a closing price to cancel the combo signal would halt any consideration of a short position (or closing of long positions). The close above the risk level was immediately followed by a strong downtrending day with a "price flip". Price flips after combo bar 13 are often used by traders as the actual "sell" signal. For myself, I like to wait for price pulse confirmation of the flip. On the daily chart that means a break of the January 11 low. I will show the daily price pulse tomorrow.
Bottom Line: Both the weekly and daily charts are on TD Combo bar 13 situations but no action is warranted - yet. The daily chart is close to an action point; but requires price pulse confirmation.
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