The monthly chart of the cash SP500 completed a TD Buy Setup in February of 2009. The market subsequently rallied. After a TD Sell Setup nearly a year later there was a consolidation phase followed by a resumption of the rally. We have now completed a TD Combo countdown to bar #13 in February 2011. In my work this is not a "sell" signal. That requires both a price flip (within the next year) and monthly price pulse sell signal; and both must occur before the signal risk level of 1402.02 is qualified as broken. Of note is prior TDST resistance at 1404.05, which reinforces the notion that the risk level area is of importance. Currently a price flip in March would require a close below 1180.55. The price pulse would need (at a minimum) a print below 1261.7.
If the March 2009 low started a new Wave pattern then we are currently in the third wave of a five wave impulse pattern or wave 'C' of a zigzag.
One thing I will be tracking closely is the notion put forward by Connie Brown that signals 'roll downhill'. The implication being that weekly and daily signals are suspect without the higher time frame signal in place. If we rally back to new highs over the next few days this would be an instance where her rule of thumb was valuable indeed.
Bottom Line: The monthly chart remains in a bullish position during March unless the criteria noted above are fulfilled.
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