SPX Daily Chart - 22 Sep 11

     A retest of the Beta pulse low is now underway in the cash SP500. After yesterday's sell off it is extremely unlikely that last week's break out on the weekly chart will be confirmed. This comes on the heels of the RSI/Composite bearish divergence on the daily chart. 
     As mentioned yesterday, the retest of the Beta pulse low may result in yet another bounce attempt. However, since the Beta low was actually broken, the price pulse model is now negative. Surprisingly I am beginning to see hints of bullishness appear! The first was cited yesterday on the daily REI. It showed the likelihood that we would bounce upward after the test of the beta low. Now I want to also point out that the RSI is at a critical juncture as it tries to hold the area reserved for support in bull markets. Even if it can't hold there today it is possible that a bullish divergence may form with the August 22 low on any close below 1123.53. Finally, today may turn out to be bar 12 of a daily sequential buy! 
    Bottom Line: My current idea is that the break of 1136.07 signals that the downtrend has resumed. Am I being too hasty in this decision? Perhaps the real retest is of the August low (previous x pulse bottom)? Today will give us more information, as will the new weekly chart. For now  my mechanical allocation mix meter has fallen to 25%.