The Final Battle
Today’s session did not disappoint, the
overnight session made a minor higher high riding the 1HR 8EMA bull train. At
the day session open, the market provided a high probability short setup that
was just below our predetermined important 2054 level from yesterday. Subsequently, the market quickly rolled a few
points to test the 2040 1HR 20EMA which was sticksaved and thus began the anticipated
flatness shake from 12PM-2PM. Also, the 2017-2022 immediate bear target from
last night had obviously failed as bears couldn’t deliver it by 12PM.
The
initial reaction to the 2PM Fed announcement was a spike down to the 1HR 50SMA
support which was quickly sticksaved on the 1minute and 5min charts. Shortly after, the hourly candle
closed above 2054 and revealed the winner and demolished the deadcat bounce
thesis. Remember, from the weekend update the initial hourly extreme oversold “A+
Tier” signal gave us the 2054 target and in Monday’s report we stated that we are
treating any bounce less than 2054 as a deadcat bounce. This was no longer the
case as soon as the hourly candle closed and confirmed the immediate bullish
sentiment.
What’s next?
Daily closed at 2060, this is above all the moving averages and
on the very important 61.8% fib retracement.
Bears’ last chance is a needed hard rejection in this
61.8%-78.6% fib retracement area back to below the daily 100SMA at 2022. This
is due to the fact that the weekly candle is trying to do a full retrace of
last week’s perfect bear candle. Along with the context of the monthly chart’s
October hold half and go upside setup that was sticksaved at the usual 20EMA on
Monday.
A pullback is very likely for tomorrow’s session due to the
first try at 61.8% fib along with hourly extreme overbought signal. The immediate targets are 2045 and 2038 for
the pullback.
The most important support to note for this pullback is to
hold the 2022 level as the intermediate roadmap is waiting to be confirmed for
the targets of 2078, 2095 and 2105. Remember, the odds favour the bulls here
based on the statistics of Santa Claus Rally since 1950. This is bulls fight to
lose, not bears.
