First, let’s start with a little perspective. This is a 2 hour bar chart back to early March. Lately the market has risen for 10 days on weaker momentum. It suggests that this 10 days has been a down phase of sorts, relative to the two previous uplegs. That would imply a breakout and acceleration ahead. On the other hand, the big scoop in the middle of the chart from which this launched only has a measuring implication of 4160. We got a little higher to the trend resistance zone now around 4185-4200.
Click to enlarge
I expect they’ll test that again today. A breakout would trigger a fearsome rally, I think. A vertical space needle. On the other hand, a rollover is likely to result in more rangebound mush. Breaking below 4160 could generate a bit of a downdraft to trend support, now rising at 4145 at 5:45 AM in New York, to 4155 at the close this afternoon.
Click to enlarge.
As always, the benefit of the doubt goes to the upside resolution scenario until proven otherwise. Although I don’t see a reason why it would do other than stay in the current channel and work gradually higher.
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This is a syndicated post, which originally appeared at Stool Pigeons Wire at Capitalstool.com. View original post.
LEE ADLER
