A bullish market for the rest of this month will begin a move back to the November 50% levels where major resistance resides for the rest of this month.
ES-minis:-
Breakout of the 3-day highs and Weekly 50% level is the first sign that a major bottom has been set.
I expect the trend to continue, but I would like to see a retest of the breakout level before a late rally upwards into Friday…
Thursday resistance the previous Weekly 50% level @ 1486
DOW…
Exact same expectation:- preferably a re-test of the breakout zone before the trend continues.
In the SPI today we saw a higher open and move down from open into Weekly 50% level. This level had been resistance for a number weeks, and today it became support. So the exact same scenario could unfold in US markets…
Dilernia Principle:- A breakout of the 3-day cycle and the expectation that the market will rotate back down and re-test the break before the trend continues.
If this occurs then support should be verified on Thursday and continue higher on Friday depending on early price action in the US markets.
The Breakout of the Daily channels and the market will remain outside these levels for the rest of the day. However any break of the 3-day highs and Weekly 50% level will normally rotate back down into the same levels the next day to verify support before the trend continues. (earlier report)
Ideally I would prefer the US markets to move upwards hit the daily channel highs and then head down into the Weekly 50% levels. These channel highs align with the previous Weekly 50% level where I think Thursday Resistance will be.
The same thing occur in the SPI today:- a Higher open and sell down from 5-day highs.
Day traders:-
Look for resistance and trade down into support.
Look for support and trade up into resistance.
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