Well, we finally made it out from under the power outage of the century! We were without power or water for seven days. Near the end of last week, Helen and I couldn’t stand it any longer and just had to get away. So we took off to New Hampshire for some last fair weather hiking before winter sets in. We are already seeing snow and ice on the higher summits, though.
While we were trapped without electricity, the market came back and tested the 1215 area. I mentioned before we lost power that the market was overbought and likely to come back and test the recent rally, though it came back slightly more than I expected. You can see that post here. We had seen absorption of the 1215 level in early October, and then a rally up to the 1289 area. It is not usnual to see the market return and test an important level.
The test did see some high volume come in. I labled this as A. This high volume served as stopping volume, but there was some supply there. We see the selling in both the volume and in the spread. Keep this in mind as the market tries to rally higher. We are pushing into where we saw supply enter the market in late July. Right now it looks like an ordinary shakeout to me, but we will see how the market unfolds.
Over the last three days sellers had their chances to take the market down, but on each dip, buyers pushed the market back up again. Buyers are in control here for the short term and we should see a drive up and through the 1289 level in the days ahead.
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