SPX Daily Chart - 18 July 2011

     Starting from the long (green) moving average at the open, the cash SP500 moved steadily downward to break below the medium (blue) moving average by early afternoon. From there a rally lasted into the close and we finished above the blue moving average. The close yesterday was virtually identical with the weekly medium moving average. Yesterday I noted how this level would be important this week, but we still have four more days to go!
     On the hourly chart, I continue to watch a sequential buy countdown unfold. We hit bar #11 before the afternoon rally. Current TDST resistance on this time frame is at 1326.88 which is close to the daily short (red) moving average. The daily price pulse chart shows 1317.7 as an important point and so this area must be considered important resistance. However; for the hourly countdown, the 1343.78 level is of extreme importance and so don't think the decline is done if 1326.88 is broken. Because, if the 1343.78 level is not breached, I expect that any rally from here will run out of steam and be followed by another drive down towards the Trend Factor target of 1281.06 (shown on the chart).
     From a price pulse point of view, the daily chart is now in a beta pulse of a bearish pattern. The pattern can not turn bullish unless beta completes above the z bottom (which it is now threatening to do) and we then go on to exceed the alpha high (which I doubt).
     Bottom Line: The allocation mix meter is at +50%. I remain quite concerned that the rally high from the 2009 low was made on May 2. As such, I will be watching closely for confirmation that the July 7th high was the top of a counter trend rally.