Priced reached our projected downside 1596 handle target yesterday morning by noontime, whereby a strong reversal rally began pushing price up to the upside target of 1623 – 25 zone by settlement. (Re-read prior day’s trade strategy). It’s certainly a great feeling to nail both price edges! The 1596 – 1600 zone also marks the maximum measured Wave 5 corrective pattern as well as completing the H&S Pattern we highlighted in previous posts. http://twitpic.com/cvoqyv/full

So with the completion of various corrective patterns, probabilities begin to favor the 1596 – 1600 zone as solid pullback support. Normally to confirm this zone a successful retest is called for, so we’ll be watching any testing process in coming days. Today is Non-Farm Payroll Report at 8:30am ET, so pre-market action is quiet.

IF prior day high gets penetrated, THEN 1625 – 1632 zone is in-play…There is multiple confluent levels within this zone so any could elicit a strong sell response. Pullback to 1608 – 1614 zone becomes important potential support. Any deeper price weakness beyond normal retracement will increase likelihood of recent low retest sooner than later and would be decidedly bearish.

Good Trading…David

Habitude Nine:
I will identify my mistakes and learn from them. I am optimistic, realistic and honest. I will not make up stories about the good or bad things that occurred in the past or are happening now. I admit when something is not working. My optimism gives me faith and courage. I will not fall prey to blame and fear.