Last’s week action was fairly straight forward as it was a snoozefest that consisted of a shakefest with the entire week’s range being only 32.75 points. It would have been a 20 point range week if it weren’t for Tuesday retest of the daily 20EMA that was sticksaved by bulls.
The key take away from the week was that bulls still managed to close above the 78.6% fib retracement and the weekly candle closed above 75% of the previous week. Remember, the goal for the weekly bulls was to hold above the half way point and continue higher.
What’s next?
Daily closed at 2090.5, this is above the daily 8EMA, 20EMA supports and the 78.6% fibonacci retracement level.
As long as price remains above 2070, the immediate targets are 2100 and 2110.
The intermediate target is the cup and handle 100% measure move that targets 2128.50. (There is also an ascending triangle that targets 2123.50)
For bears: breaking below 2070 would be first hint of bull train exhumation and warning. A follow through breakdown below the week’s low of 2065.50 would confirm a temporary trend change and targets 2059 and 2045 for the extension.
18 Months of Range Bound Market – Approaching the Range High
As briefly discussed in older updates, the market has been in a large monthly range bound market for the past 18 months with the range of 1803.25 to 2134. Based on this context, the daily/weekly bull train is approaching this massive range high resistance area of 2100-2134. This means that the swing bears are going to try and re-short here as long as price remains below 2134.
Weekly Chart Perspective
This past Thanksgiving week, the bulls have held above 50% of the Nov 16’s bull bar. Now, they need to trigger above the Nov 9 week’s high of 2097.75 for the mini squeeze to intermediate targets of 2123 and 2128.50. Remember, the previous weekend update scenarios were straight continuation up/consolidation week first then up next week. This means that this week bulls breakout and go.
Monthly Chart Perspective
Tomorrow is the monthly candle closing and it is very likely it’s going to close above the 8EMA. October and November have fixed the damage done by the August massive bear breakdown candle.
In the context of the monthly chart, August 2015 vs October 2014 formed a double bottom – this is the intermediate swing breakout bulls are looking for new ATH. Remember, the October monthly bar was a huge bull engulf that still gives the potential of a breakout the next few subsequent months as long as price stays above October’s half way candle point.
