(Update 8/23/12 3PM EST)
T2 has dropped to 1409.02 where the System will enter long.
S2 = 10+ = bullish = Trend Score + Turn Score = 8 + 4
If SPX were to rally above 1409, S2 would likely become more bullish, so it would be the strongest bull setup in weeks. However, if the 20dSMA (currently at 1399 and rising) becomes resistance on a dead cat bounce, the System may turn bearish in which case the System would probably enter short in the 1390s or possibly even the 1400s. Good luck.
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(Update 8/23/12 11:45AM EST)
The System was stopped out at 1405. Unfortunately, 2 rare 20pt gap ups prevented the System from joining in the bulk of the uptrend from 1329 and then 1355, so we are stuck trading a topping or transition phase. I've seen this happen over and over since I started my System. Typically, the System will make large gains in a 1-2 week trend with 1-3 successful trades and then tread water +/-1% over the course of several more whipsaw trades until the next trend is established. That's the nature of trend-based systems. If SPX decides to rally to resistance in the 1440s, the System will hopefully catch the bulk of that and break even over this grind. If SPX decides to breakdown to the point of turning S2 bearish, hopefully the System will catch the bulk of the downtrend too. Meanwhile, whipsaw, chop and grind is the order of the day. The System will re-enter long at 1416.13 (or lower with each lower hourly close) as long as S2 stays bullish which is expected at least through today. Good luck.
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I am lowering the stop to 1405 just below the 89hEMA at 1405.17. I am trying to avoid a 1pt piercing of yesterday's low to complete an ABC in front of another SPX rally. But, I don't want to go too much lower than 4-candle support at 1407 because there is a chance the top could be in and a 50pt SOS drop has finally started. Also, another long re-entry is possible at 1416.13 or lower if we get stopped out. Good luck.
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