The
Bear Train Derailment
Friday’s day session
started out with an hourly bull breakout bar that needed to hold half to continue
higher. Bears stepped in at the 2094.50 high when the first immediate target
was fulfilled. Subsequently, it was just a shakefest the 15minute chart forming
lower highs for a few few hours until bulls sticksaved at the 1HR 50SMA support
near the end of the day. Bulls won the battle of the weekly candlestick since
they pretty much retraced 100% of last week’s bear bar.
A quick recap of
what occurred this past week:
- Monday the market got the deadcat bounce as we had expected and daily closed as a huge bull engulf bar
- Tuesday consolidation day where daily 8EMA,20EMA and 200SMA was rejected first try
- Wednesday bears failed to defend their levels as bulls retook the 61.8% fib retracement level and closed above all the moving averages. A full retrace back to 2110.25 was in the works. Along with possible cup and handle 100% measure move target at 2128.50. This concluded that it was not a deadcat bounce anymore since the daily bear train short re-entry setup was over
- Thursday another consolidation/shakefest day for hourly moving averages to play catch up
- Friday initial hourly breakout that became an intraday shakefest and bulls sticksaved at 1HR 50sma near the end of the day. Waiting for next week’s straight continuation after monthly options expiration shenanigans is over
What’s next?
Daily closed at 2088.75,
bulls have managed to close above the 78.6% fibonacci retracement level. This
concludes that a full retrace to 2110.25 is in the roadmap now. Price is above
all the daily 8EMA, 20EMA and 200SMA levels and bears had failed their swing
re-short entries setup.
The first immediate target of 2092 was fulfilled on Friday. This is a bull train until price proves
otherwise as it is above the daily 8EMA and 20EMA.
As long as price remains above 2070, the
immediate targets are 2100 and 2110.
The intermediate target is now the cup and handle 100%
measure move that targets 2128.50.
Weekly Chart
Perspective
This week the bulls managed to retrace the previous week’s
bear bar entirely, this should provide a nice feedback loop of trapped bears
squeeze once price triggers above 2011.50 the November 9th week
high. A straight continuation up/consolidation week first then up the next week
are the probable scenarios based on the current setup. It is also a shortened
week due to Thanksgiving which means we will not be trading regular size
positions after Tuesday/Wednesday.
Monthly Chart
Perspective
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.
