Thursday, April 25, 2013

ImageThe S&P 500 (SPX) four hour chart of the DeMark TD Sell Setup recorded the final 9 count. Price exhaustion in the form of a reversal or consolidation is general practice. However, given the high price action to SPX 1590.47, far past the ideal SPX 1575, a temporary price consolidation may all the bears may get to chew on. But for now, we’ll see how this all plays out. 

ImageThe DeMark daily chart is of interesting note and it’s the one item that is keeping me from getting bullish too quickly. A TD Sell Countdown 13 count is coming as soon as tomorrow. If SPX records a daily price high that is greater than or equal to the close of bar 8’s close (SPX 1593.37), then TD Sell Countdown will complete. What is also intriguing is bar 8’s closing price of SPX 1593.37 is the same level for TD Magnet. TD Magnet is part of Tom DeMark’s version of Fibonacci levels. If a double top were to occur, DeMark observed that it is more likely a reversal would occur at the closing  price of the previous high instead of the standard 100% Fibonacci retracement level. 

This morning’s price ramp was a surprise for me. The technical divergences are not overwhelmingly bearish so prices can move forward. But as outlined by the DeMark interpretation on the daily chart and the end of the TD Sell Setup on the four hour chart, I’m willing to stay on the bear course for a little longer. (updated mid trading day)

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