As of yesterday close, both 3-Day Advance Issues and Tick16 Short Term are pointing up from their usual oversold zone.
This confirms the potential of a very powerful rally that can last for several days.
So we have identified the coming of the pullback correctly, and we have anticipated the bounce and got one. Now what?
Tricky issue with the gap below in S&P index future around 1310 to 1320 area.
The reason why it is tricky is that a gap is usually a strong magnet to pull prices to move towards itself. That in combination with Tick16 Long Term pullback back to the neutral zone means there is a chance of S&P topping out 3 to 4 days from the last daily swing low and produce a sharp sell off.
So today S&P is facing its biggest challenge (a resistance area) before it can go much higher – if it fails to blast thru 1330 to 1340 gap area above today or tomorrow, it will be forced to drop back down to 1320 to face the potential of being pulled down to 1310s.
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Market Internals 2011-07-20
As of yesterday close, both 3-Day Advance Issues and Tick16 Short Term are pointing up from their usual oversold zone.
This confirms the potential of a very powerful rally that can last for several days.
So we have identified the coming of the pullback correctly, and we have anticipated the bounce and got one. Now what?
Tricky issue with the gap below in S&P index future around 1310 to 1320 area.
The reason why it is tricky is that a gap is usually a strong magnet to pull prices to move towards itself. That in combination with Tick16 Long Term pullback back to the neutral zone means there is a chance of S&P topping out 3 to 4 days from the last daily swing low and produce a sharp sell off.
So today S&P is facing its biggest challenge (a resistance area) before it can go much higher – if it fails to blast thru 1330 to 1340 gap area above today or tomorrow, it will be forced to drop back down to 1320 to face the potential of being pulled down to 1310s.
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