Pressure continues to build for an upside breakout, but before getting too excited, we need to keep recent action in perspective. Uptrend has been very symmetrical as buyers respond to any significant pullback…Value Area has also been slowly creeping higher..certainly a bullish sign…Cumulative Delta reading continues to be suspect as price probes higher…not everyone is convinced of further upside. Now this could certainly be hedging of long positions which is to be expected, so in any case, upside enthusiasm appears to be muted.
Overnight probe of Monday’s high keeps the upside pressure intact, though no new expansion high…perhaps that comes today, or next week when beginning of month mutual fund inflows occur…Good time for the “BIGS” to unload long positions…to the unsuspecting retail mutual fund investor.
We’ll continue to “stay the course” of buying pullbacks as this seems to be the path of least resistance. Pullback to 1844 – 46 zone should provide ample support, so we’d be buyers back into this zone. Failure to hold this area suggests renewed selling interest and targets 1838 – 40 zone.
IF price does indeed breakout and convert recent high, THEN we are looking for push higher into 1858 – 1862.50 zone.
Stay Nimble and Flexible!
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