In my posts this week, we have been anticipating each of the market’s next moves in advance. On Sunday night, I noted that the market was about to fall with a target zone around the 1350 level. I noted that we were about to dip down to test last year’s high (May 2011 high). You can see that post by clicking here. The market reached that zone. On Tuesday night, I said that the market was due for a rally and also said, “The upside appears limited to around the 1386 level, unless we see see evidence of buyers stepping in aggressively.” We started the rally the next day, as anticipated, and then reached the anticipated level, too, today. And, buyers did indeed step in aggressively. (You can see Tuesday’s post by clicking here).
What’s Next?
Buying was definitely aggressive. The rally today ran farther than expected and volume was good, indicating strong buying. Will we see follow through? I think we will.
Look at the weekly chart. Tomorrow (Friday) completes the last weekly bar. You can already see that it dipped down into support and rallied aggressively. If we close near today’s close or higher, we will have recorded a very bullish week – one that reacted and strongly rebounded off last year’s high. It will represent a successful test of last year’s high. So watch tomorrow’s close. If it is firm and completes a bullish week, we can expect follow-though next week and at least a test of our highs so far this year, and likely new highs in the near future.
Leave a Reply