Thursday’s uptrending price bar was not the strongest day in history. Friday, however, did produce a strong uptrending bar and the price pulse down into the 10/24 low is over. That low is now marked as both a fractal low (blue diamond) and a CIT (Change-In-Trend) by the green circle since the new price pulse upwards has exceeded the starting point of the previous downward pulse. CITs are very good at marking the end of price patterns, and it looks to me like the completed pattern is an “a-b-c” zigzag.
Yesterday I laid out some price targets; all of which were new all-time highs. The RSI (included on today’s chart) held the 40 level during the recent decline which is indicative of a market in a bull market – a market with the strength to reach new highs. I don’t suspect we will reach those new highs straight away. Or will we?
There are only two more Gann/Fibonacci clusters on the daily chart before new highs are reached: 1536-40 and 1565-68. We will be challenging the first level today. I actually hope we get a reaction so that I can get long. My developing trading system requires that at this point. The only issue for me is that I expect only a brief hesitation. I think the rally will resume quickly and last the rest of the week.
Bottom Line: At this point the price fractal low and Change-In-Trend (CIT) on 10/24 are just as good as a technical “buy” signal. I now need an entry point to go long the SPY.
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