The market–as represented by the S&P e-mini futures–has certainly been bullish. We have had a run of several up days or near up days in a row. The market structure has been conducive to a bull run and the run has been impressive. At some point, however, the current rally will end and we will see a pullback of some degree.
What Will Turn This Market
While I don’t try to pick tops, I do pay attention to the condition of the supply and demand in the market and note the areas within the structure where the market may turn. If and when the market reaches those area, I am alert to the market changing its recent behavior. I am also alert to the market not being willing to change its behavior at these points–that is important information, too.
The last two days have been very bullish, but we saw less volume and less range on Friday, potentially indicating that the buyers are tiring. Longer term supply lines on the weekly exist just overhead. We may see the market lose steam up here. For Monday, watch the 1955 to 1960 level as potential resistance. Any pullback is likely to find support coming in around the 1945 – 1940 level.
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