Having reached a peak last week near 1695 the S&P has pulled back to form support at 1670. Price action is now “bracketing” the upper and lower edges. This mid-summer consolidation is anticipated to continue until either 1665 is violated to downside or penetration of 1695 high. Midpoint of this range is 1680.
Friday’s reversal off lower “Money Box” Zone produced a strong upside move closing price near high of day. Be watchful at the D-Level Money Box Zones as these are expected target/support zones for high probable trade opportunities. What is needed from these zones is a “reversal signal”…In the twitpic link below the reversal took shape with a classical “tweezer bottom” pattern.
Currently price is near middle of 5 day range with overnight price movement neutral and subdued. The general strategy in range or “bracketed” markets is to buy dips and sell rips at “price edges”.
IF price penetrates 1689, THEN potential would be to test upper edge of range near 1690 – 95 zone. Pullbacks to 1670 – 75 are considered buying opportunities till proven otherwise.
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