Since the 9 count TD Sell Setup that was recorded yesterday on the S&P 500 (SPX), the opening 20 point and recovery may all be all we can expect from this timeframe. The SPX is still under the 1662.71 TD Propulsion threshold but with today’s open and closing bar higher then the 9 bar, odds are growing that the 2 hour chart will draw into a 13 count TD Sell Countdown. The 4 hour timeframe is the designated timeframe to watch. What would be ideal for the bears is for the market to trade sideways to incrementally higher preferably under the TD Propulsion level or even the 50 day moving average (1665ish) and record a 9 count. This is scheduled for next Monday as bar 8 and 9 will finalize as long as the SPX closes above 1653.01 today. Weekly charts are somewhat rosy after the close of today. This opens the door for a higher retracement perhaps to the 1680 area for the SPX. If so, it does setup for a head and shoulders pattern. The Dow Industrials (DJI) may have bottomed out for awhile. The Nasdaq Composite (COMPQ) has a real good chance of hitting new highs. The Russell 2000 (RUT) does not look as constructive which helps paint the overall bearish picture.
Positioned neutral. Experience was my best guide today. Entered short when the SPX went negative which is also near the level where the 4 hour SPX chart would produce bearish price flip. Average True Range for the SPX is around 16 and when the SPX drops 20 handles under 30 minutes, it made sense to cover and wait for a better re-entry point that never came. Plan going forward is to stay neutral unless SPX closes below 1653.01 today. (updated intraday)