Yesterday, the market dipped below Monday’s low, turned around and rallied strongly. Good volume came in and the market closed near Monday’s high and very close to the August 31 high. It indicates that buyers are making a concerted effort to hold the market and not let it fall. Only time will tell if they are successful.
We should have seen downside follow-through from Monday’s UpThrust reversal. When gains are being held near a known resistance level we begin to think about the possibility of absorption. A move down closing below the 1180 level would indicate the UpThrust remains active. The longer gains are held above this level, the more likely we are seeing abosorption.
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