US markets have completed the 2-day stall reversal:- First expectation this week of two days with down bias.
Tuesday:- Choppy 2nd day with Weekly 50% level supporting the ES.
Currently markets remain trading between the December monthly 50%, (Resistance) and Weekly 50% (Support)
I would have liked to have seen a bit more weakness in Tuesday’s trading, or at least the DOW move upwards 95 points so that there would have been a ‘spiral top’.
When we look at Market Dynamics, we can see that today there is a large gap to the 5-day lows, and both markets are trading above their 5-day 50% level.
On Wednesday, that 5-day gap narrows and the lows jump upwards, all of a sudden the 5-day 50% level is now above price. (short-term weak pattern)
This gives more of a reason to break support on Wednesday and begin a move down towards the December lows, as part of 2nd monthly sell pattern.
However, my analysis was that Wednesday was an UP day, therefore if Weekly support is going to be valid, then the Weekly 50% level along with the 5-day lows will push price back towards the 5-day 50% level and could easily head back towards the 3-day highs.
A test of the 5-day lows in UP trending markets will push prices back towards their highs.
Full report later…..
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