New Consolidation: Upside Break Likely
The Rounded top that formed Tuesday just sort of went sideways Wednesday, again with no definitive action or direction – as if the market is waiting for something. But in the act of doing that it formed a new Consolidation in the 300 point range from 26,800 to 27,100. That should make it easy for us to detect the next impulse move, by watching these boundaries (which are marked in the 39 Minute Chart.)
The Daily Chart continues to show the wide range we have been in for months now. Will we continue to the top of the channel? While it looks as if this market has run out of gas, an upside break through the top of the new Consolidation will be bullish. It’s a very narrow range, so direction should be easy to tell Thursday. We also need to watch the lower line at 26,300. A break of that line, the bottom of the wide Trading Range, would be quite negative.
Yesterday I said, “One thing is certain… Wednesday will not be boring.” Well, I was wrong. Wednesday WAS boring. Today’s setup is good for either direction on breaking the narrow Consolidation range. Once that happens, we will know short term direction and will be looking to the next Support/Resistance Level marked in the charts. The market is waiting for something. It’s likely to get its answer soon.