The ability to hold at the important support at the 1090/85 old resistance/weekly down trendline suggests more upside will develop after the strong close just above 1100. Overall we want to see the bulls maintain closes above the 13 day moving average at 1089.22 on the daily chart when setbacks develop. Near term support remains at 1098/1102 which should ideally hold after this opening week strength. More importantly we want to see a close above the 1110/12+ area to extend the bulls strength into the 1118.75 resistance and then the 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). Although we continue to think a penetration of that area will be difficult a break above should extend into the 1150 and potentially the 1175/95 area over the longer term. But we have to take one step at a time into late summer.
An unanticipated close below 1100 would warn of a more two way trade nearer term that could again test the 1083 low. But a failure below that critical support would warn of a lower high to extend down into the 1074/68 support. Closing 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 1083 low is broken we want to get long again at 1107/08 and look for a close above 1112 to add to the position for a move into the 1129.50 high of June.
Strategy- Long at 1086/84, stop 1081, target achieved this a.m. at 1112/1114. If you did not exit go long 1107/08, stop 1101, target 1124/28. OR buy 1112 to get back in the market and stop out at 1101.
