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.
