Ignoring the volatility, a key aspect of the last few sessions has been the fight over the risk level (1127.87) associated with the sequential buy signal on the hourly cash SP500. At Wednesday's close we had a qualified break below this level but the bulls regrouped overnight and were able to hold at the open on Thursday. This led to the break being unconfirmed and another thrust upward. Price then reached our initial target zone during the closing hour.
I still believe that we will need to retest demand (the low) again before we can say that a sustained bullish rally is underway - - and the current demand line (dashed green line) reflects this well. For now however, we need to watch how price reacts at each of the target zones. Yesterday's break above the zone around 1180 (fibonacci and trend factor) was qualified. Let's see if we can confirm it today. I need to add the 1215 area to the list of resistance levels as the short (red) moving average is sinking towards it. Right above that is still the target at about 1245.
Bottom Line: The allocation mix meter is at +25%. Watching for the bounce to hit resistance which will lead to a retest of Tuesday's low.
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Thank you! Have a wonderful weekend!
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