Last week, we saw the market rally up into new high ground for the year. As we have been discussing for many months, the market overall remains quite bullish. There has been no serious indication of supply thus far.
The daily chart below shows a nice gap up and island reversal. That is quite a large gap up. Reflecting eager buying, it seems very bullish.
That buying continued into Friday of last week, with the last half hour or so rallying firmly into the close. But on the intraday, we may be getting a tad overbought. I have posted a 120-minute chart below to show intraday action. You can see we are driving higher, but also price is at the upper edge of the trend channel. We can expect a pullback from this level or on a further move a little higher into the 1368-70 level.
Should we start to get a pullback on Monday, I would look for initial support to come in around the 1353 – 1355 level. There is no telling if the market will pullback to this level or eventually go lower, of course, but this would be a good level to watch with any short positions.
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