The news of a cease fire of the trade war and the most recent FED statements seem to be providing the much needed good relief for the market. The S&P 500 futures gapped up almost 40 points at open for the overnight session on Sunday night. The important question is can we trust this rally? Are the problems causing the market to selloff in October gone?
On the day of inauguration, the SP 500 index gapped higher at open. But it failed to exceed 15-minute open range. The intraday high was made at open. Open range high is statistically significant. It means the market had good reaction to good news (inauguration), but there was no follow through. Simply there weren’t continuous buyers
We were at the 10th bar in the 3rd daily cycle. The last nine trading days have been range bound between 2254.25-2282.10. The high @ 2282.10 established on 01/06/2017 has not been violated. Violation of 2254.25 on the downside will indicate the selling pressure is picking up. The selloff will last at least until Jan 26, 2017 to be around 2200 price level.
We recommend take partial profit for 1/3 of the position today. This partial profit taking generated more than 7% overnight. This is a member blog. Please join us to see the detailed information.
Due to the weakness in the general markets and the fact that CLF is in the late stage of the weekly cycle, we recommend caution and take some profits.
Today’s intraday weakness that let the index to take out a prior low @ 2264.06. This action made the prior high @2282.10 a swing high. Most likely this swing high is also a bear top for the 3rd daily cycle, which is also the weekly beta cycle high if this high @ 2282.10 is not violated by Jan 19, 2017. This swing high occurred in the daily bear top timing band.
