On a macro basis: There is a macro resistance line coming in at 13507 all week. We are looking for a multi-week smackdown from where it came in the week of 9/11 at 13522, and are seeing some of this as we have come off $89.4 so far. However, this has been on hold since we broke above the bullish pattern at 12769 mentioned below. We left a medium term bearish reversal intact above on 9/18 that also warned of continued pressure in the days/weeks ahead. We have seen $48 so far. However, this is also on hold. Decent trade above 13234 will negate this definitively.
On a shorter-term basis: I would note that possible areas of exhaustion for this move down from 13624 come in at 12732-644 and 12492-378. We have basically held the upper of these, but with a $1.6 violation. The decent trade above 12769 (-1 tic (10 cents) per/hour) on 10/8 projects this upward $9.5 minimum, $14 (+) maximum. We have seen $19.8 of this so far. This will come in at 12695 (-1 tic (10 cents) per/hour starting at 8:20am EST). If we break back below decently; look for decent profit taking to come in, and a reentry for macro shorts. The maintained gap higher Monday left a short term bullish reversal intact below that also warns of decent short covering, likely for days. The decent break above 12850 projects this upward $22 (+) based off an ‘ok formation’, but can withstand $5.6 of violation and remain valid—should we fail by more than this, this will be a sign of renewed bearishness. We have seen $11.7 of this so far. Decent trade above 12989 (+.2 of a tic (2 cents) per/hour starting at 11:20am EST) should bring in decent continued strength. I would NOTE: when the market has two gapping days higher in a row, it will often back fill into the upper gap and possibly into the day below before (if) continuing higher.
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