Support and resistance held nicely. Are we due for a breakout?

As we expected, there was some good follow through lower after yesterday’s RTH close. The dip was even more pronounced early in today’s RTH. However, that dip attracted some strong buying and that drove the market above even yesterday’s high. The 1138 area is now good sup with res in the 1146 area.

A look at the market’s condition…is the peak in place?

A bit of a surprise rally overnight that pierced through the 1127 possible resistance area. The bulls took back control of the weak interday up auction with a convincing rally both in the globex and RTH sessions. The rally tested the week’s high and looks like it’s poised to continue next week. Look for likely support in the 1140 area then at 1130. No strong resistance until about 1160.

A roller coaster of activity as the 1030 area held overnight for some time. However, once it broke the market took a dive of another 12 pts. The main support near 1106 was not breached so the bulls have some life still in them. Look for resistance at 1127 with a possible test down to 1106. If it holds below then look for more selling.

Our 1133 support held, but monitor it and 1131 as support tomorrow because Tuesday might have been a possible blow off. After the FOMC released its report the market rallied up to 1144 but was strongly rejected. The 1140 area is likely resistance. Swing high might have just formed today. Confirmation will take a couple of days.

Our support in the 1118 area held as the market only dipped to 1117 overnight. A strong rally during the Regular Trading Hours (RTH) once again confirms the continuing up auction. Look for support in the 1133 area. No real resistance overhead.

A nice rally in the overnight session was rejected in the regular trading hours. However this rejection was not strong and the support at 1118 held beautifully. More up is likely but would need to hold above 1123 for it to be convincing. Otherwise the market could come back and test 1114 then possibly 1110.

Another fortunate day for our traders in that the market came down to our support area we mentioned yesterday of 1114 and rallied for the rest of the day. New support is in the 1118 area. Our interday bias remains up with the next target at 1130.