The rejection from below the 1120 weekly resistance area continues this correction into important support at the 1090/85 old resistance/weekly down trendline. This area consists of the 13 day moving average at 1089.22 on the daily chart which we think the bulls need to hold if higher territory is to be tested. Resistance drops down to 1098/1102 and then the more critical 1110/12+ area. Surpassing that area is needed to shift the focus on the 1118.75 and more critical 1129.50 highs of this big congestion zone (50% retracement of the 1211.50 high to the 1002.75 low of the last three months and the 61.8% retracement level). Overtaking that resistance remains essential to challenging the 1118/20 zone ahead of the 1130 zone highs- the major piece of real estate to renewing this once strong bull market.
For today’s weekly charts the bulls will have to close above the 1096 resistance as a minimum. That zone represents resistance and the 13 week moving average on the weekly charts.
But a defensive close below the important 1084/80 support area would warn of a lower high to extend down into the 1074/68 support. An even more bearish close below 1060 will confirm a top to push into the 1051 through 1035 area and give the bears control of this market again. But until the bears take control we want to get long in the 1084/86 area and use a stop at 1081.
Strategy- Flat. Stopped out of long from 1100/1098 at 1094. Attempt another long at 1086/84, stop 1081, target 1112/1114. Exit if not above 1104 into the close.
