In the last post for trading on Thursday, February 13 (click here to see that post), we suggested that that market could fall to 1805 to 1800 and then find support. The market fell to 1802.25, found support, and rallied to new monthly highs. We saw a continuation of that up move on Friday, to a high of 1838.75. So, what’s next?
Next Up
Recent highs created on December 31, 2013 are 1846.50. Will the market run up and through this high, falter here and turn lower, or not even make an effort to run up and fall lower? This is the question many traders want to answer.
Actually, the answer to that question isn’t that important. What is important is knowing the levels at which the market is likely to turn.
Clearly, 1846.50 is a key resistance level. A push above this level indicates strength and a subsequent first retracement would be a buy opportunity. If the market fails here, however, then look for downside trades.
Given the SOT in prices over the last couple of days, the market may pull back a little first. Should the market pull back on Tuesday, 1832-28 is likely to be strong support. I would expect the market to find buyers there. If not here, then the next level would be 1824 to 1820. I will be looking for an intraday selling climax or shake out for a buy opportunity anywhere in this area as highlighted by the green band.
Longer term, my reading is for new, all-time highs.
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