Price has finally turned down … but how significant is this turn?
If the cash S&P500 closes below 1675.02 today (Wednesday) then a price flip will be recorded that triggers the TD Sequential “sell” signal that printed bar 13 on July 8th. Instead, if the market resumes the rally without a price flip, any move above the 1692.51 level will give us a new TD Setup and recycle our sequential countdown.
On the RSI chart (top pane) we now have a bearish divergence between the indicator and price. Please note that this divergence is occurring in the 63-67 zone which often signals that a market is transitioning into a bear phase. However, this signal is tempered by the fact that the Composite Index (middle pane) made a new extreme high along with price. This is a warning signal that any sell-off may be shallow. Let’s see if we can trigger the sequential signal today.
Saxby, good to see you back. Hope things are working out for you. Just to offer you a suggestion. What you have presented is just fine, but when you see an over run of a 13 count as we have on the daily, it's probably not the defining metric for exhaustion at this time. Instead, either move up a degree on the charts (the weekly is forming a Sequential 11 this week) or possibly the TD Combo which is currently at a 12 count waiting for a 13. One of those 2 is more likely to be "the one".
ReplyDeleteHere's a chart with the Combo (in white) added.
Regards, Wallfly :))
http://www.screencast.com/t/qVs6JE1uFWY