When you have a large rally and then you can't sell off, that is a good sign for the bulls. Think about it, if we were fairly valued down below and now we are 3% higher after yesterday's move and sellers don't come into the markets, does that mean that sellers are on the ropes and buyers know that?
If you have a big move up followed by a small to no move down, look out above. Again, we have the 1200 level in SPX and then the famous 1220ish level. Here is the chart:
Past performance is not indicative of future results
So we have had a 12% move from 1080 to 1200, will we test the 1220 level? Economic data and international news has been "positive" and technically, it seems like we will at least test the top of the range.
Moving to forex, we had numerous opportunities today, even though it was overall a rangebound day. So it was a very technical trade where you could go against the moves and play the "edges of the ranges". First up, a support line where a big move down came to rest and moved back to the upside in the GBP/USD:
Past performance is not indicative of future results
Next, a DOUBLE FALL LINE TRADE in the EUR/USD and the USD/CHF:
Past performance is not indicative of future results
Past performance is not indicative of future results
Let's see what happens tomorrow as we are light on the data front and based on past performance, the equity markets like to go up when there isn't any data to block its path.
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Happy Trading and Be Environmentally Cool
Coach Brian
Forex trading is one of the riskiest forms of investment available in the financial markets and suitable for sophisticated individuals and institutions. The possibility exists that you could sustain a substantial loss of funds and therefore you should not invest money that you cannot afford to lose.
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