On Friday, we saw the US Stock market as represented by the S&P e-minis (ES) hold just above the 1360 level – a level we discussed in my last post (which can be viewed by clicking here).
We remain oversold on the daily chart. Volume was sustained Friday as the market rose off its daily low. We are also revisiting the yearly high of 2011 (1373.50). So, there is enough reason to anticipate a rally. A test of Friday’s low, a Spring off that low, or holding a higher low on Monday will all ignite a rally.
If the expected rally materializes, we will watch it very carefully. Can it push up and through the 1394 level and then break above the downtrend line next week? That would be constructive for this market and indicate a try for a future retest of the 1468 high. I suspect, however, that we may need more work down here.
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