Even Captain Ahab knew that Moby Dick could not stay submerged forever and had to come up for air..Such as with the recent price action of the S&P. The Bears have tried multiple times to keep price “submerged”, only to have it rise even more until finally…”She Breaches!”
Next question to be answered is whether or not Mr. Mkt will stay buoyed above the 1840 handle zone (breakout zone), or re-submerge? We’ll continue to give the benefit to the Bulls as long as the breakout zone continues to hold, so buying the pullbacks will be the broader trade strategy.
Today marks Day 2 of current Cycle, which typically unfolds as “backing ‘n filling” price action. Today’s inferences will be: If price holds the 1840 handle breakout zone pullback, penetrates and converts 1845, then this will suggest buyers view the breakout as new value opportunity. Upside price targets on renewed buying are 1848 – 52 zone, then prior high at 1856.75.
Failure to hold breakout zone suggests yesterday’s price action was nothing more than a major “stop-run” for the shorts. Any deeper pullback would target 1835 38 zone, then 1829 – 31 zone.
“Advantage Bulls”…for now!
I am courageous and I always act, even in the face of uncertainty and possible loss. Do not say, no fear. Feel the fear and act anyway. I may be frightened, but I still saddle up. I am not reckless. I act promptly in accordance with my methodology. I respect my calculations. I have a healthy respect and I balance that respect with my courage. I am an explorer. I am on a hero’s journey.