Happy New Year!
Happy New Year to all our readers! Helen and I (and Asta, too!) are back from holiday. We had a great time spending Christmas Week and New Year’s in northern New England. It is a wonderful place to enjoy the holiday season.
Rally from Spring – No Sellers
The market has not given up any ground since mid-December. Keep in mind that it was a Spring that ignited this rally, and these can be very powerful setups. Why so powerful? Well, because lower prices get rejected. It is a clear sign that sellers have no strength and that buyers can step in and take control.
And, we continue to see buyers in control. The dips down in November and mid-December failed to bring out sellers.
Pushing Above Resistance
We have seen tonight’s chart before. The long upper box highlights the resistance area that stretches from the June lows through the highs in October, November and the end of December — six months of market structure. Presently, the market is attempting to push up above this resistance band.
On the first day of trading for 2012, the market gapped up and over the resistance band. Today, it came back down and tested it, finding no sellers to drag it back down.
What’s next?
The immediate key level is yesterday’s high at 1280 and the October 27th high of 1283.50. The market must surmount this area in order to continue to rally higher. Pushing above this level would pave the way for the market to test last year’s highs and perhaps make new highs over last year. We shall see.
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