Thu 7/26/12. Daily Updates.

Date-Time	Thu 7/26/12 3:15PM EST
Active SPX Trade	None
System Score (S2)	10 = Trend Score + Turn Score = 10 + 0 = bullish
Trade Trigger (T2)	None at this time. 4-candle support has now risen to 1351.48, but S2 will still be a bullish 6-8 at that level, so a T2 stop would be set at 1343.97 if the System were long. A new long entry could be generated if SPX falls below 1351 and then rallies to break 4-candle resistance before falling too far first.
Commentary	I'm enjoying the Olympics so far. Q2 GDP estimate and sentiment tomorrow morning. Will bad be good and mediocre be bad? Good luck.

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Date-Time	Thu 7/26/12 11:25AM EST
Active SPX Trade	None
System Score (S2)	9 = Trend Score + Turn Score = 8 + 1 = bullish
Trade Trigger (T2)	Unclear at this point. Stop would currently be below the 50dSMA at 1333 if we were long, so we will likely have to wait a day or two for a System setup.
Commentary	Today's bounce makes 1380-->1329 look like 5 waves now, but I offered a few reasons why it might not have been. The indicators that were producing a high Turn Score usually take at least 2-3 days to reset (this is day 2), but it's unclear whether SPX will rally to 1380+. One side of me says Draghi and Bernanke don't want to be cornered into large easing in August and would rather stall a few months, so they are jawboning as much as they can to keep the markets up prior to the disappointment they'll encounter shortly. However, regardless of my prognostication, the rubber will hit the road on Wednesday August 1st, and this Friday's GDP and next Friday's Jobs number are looking to be worse by the day, so we have lots of potential volatility staring us in the face for the next 6 trading days with today as the appetizer. BTW, the large discretionary spending drop appears to be sticky for the first time in a year+ since it has lasted a couple weeks. The current SPX rally may constitute the 2-3%+ rally usually seen 4-5 weeks after a monthly spending pivot breakdown as we had on June 30th. Once the current rally ends, we are left with an 8%+ SPX drop from the week of July 9th +/- 1 week or from late August based on discretionary spending cycles since 2007. Once again, that likely depends on the Fed, our heroin dealer. Good luck.

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It appears bulls are getting the large gap up they needed to 1345+ and may be able to turn 1352ish into support. Due to breaking T2, the System will stop out of its short trade from 1369 at the open. However, the System doesn't currently have a rule for dealing with such a large gap beyond T2, so it will sit this move out. We'll see what the System Score is on the next 4-hour candle break. I'm considering the possibility that the Draghi talk and late-Tuesday Hilsenrath article were coordinated with the Fed and how that plays into likely bad upcoming GDP and jobs numbers. Good luck.