Yesterday, resistance was identified in the area of 1965 – 1970. Today, the market stopped it’s upward movement at 1968.25.
Today–marked A on the chart–was an up day. Although it was up, it also traded inside the range of the previous day. We had good volume, but the market remained largely range-bound. We could be seeing the market accumulating around support as we have seen on several previous swift dips down. That is entirely possible. We could also be seeing the start of a larger pullback. Frankly, it is difficult to tell. There certainly has been some weakness, but we are also sitting on top of support, holding that support, and in an overall strong uptrend.
The key level to me is the 1970-1975 area. I’ve highlighted this area with a small red rectangle. For tomorrow, I would expect continued follow through to the upside from today’s action. Nonetheless, the area around 1970-75 is likely to be difficult for the market to overcome. Watch this area carefully, especially if price reaches this level early tomorrow morning (US session) assuming the market goes up there. Pushing through this area will indicate the buyers remain in control. Failure at this point will indicate sellers want to try for another push down.
Should the market pull back overnight (Asian & European sessions) or during the US session, pay attention to the 1965 to 1960 area. We can see intraday support develop in here. Pushing below this level indicates selling has resumed. Holding this area (again, if it comes down to here) suggests buyers are acting on their convictions and higher prices are likely.