The much stronger then expected up move has overtaken weekly resistance at the 1110+ area and pushed into the 1116 zone in this early Tuesday trade. This zone represents the 50% retracement of the 1211.50 high to the 1002.75 low of the last three months. Another close above that key resistance should give the bulls the opportunity to move into the 1118/20 zone ahead of the 1130 area.
Support moves to 1100/06 (a big zone) and holding that area is needed to move higher over the intermediate term. But closing below would suggest a near term sideways trade will develop to test the 1100 area and potentially the more threatening 1090/85 old resistance/weekly down trendline.
The daily oscillators are above our critical 0 area on the macd and two other proprietary oscillators but this four day strength into new territory also brings the threat of some sideways trade which we are anticipating this week and which happens in every recovery move.
A close below 1090 would warn of a lower top that could retest the 1084/80 support area. But a critical break of that zone would negate this upside scenario to open the way to the 1074/68 which we would think must ideally hold to give the bulls any footing to move higher again. An even more bearish close below 1060 will confirm a top to push into the 1051 through 1035 area and give the bears complete control.
Strategy- Long at 1087 took profits at the 1100 zone. Short term longs in the overnight trade at 1108, stop 1109, target 1118/20. If not long try a long at 1111.50 stop 1009.00 target 1118/20.