Lower Boundary Broken: Watching the Wider Range
“Consolidation formed a narrow, 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.” The lower boundary was indeed broken, leading to a decline in the afternoon. This move is somewhat bearish, but we have the Support Level below at 26,300, plus the next Resistance at 27,000. That’s still fairly narrow range of just 700 points. The market should move within this range for at least a few sessions, providing trading opportunities at each level.
Yesterday: “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.” So we had the downside break which was good for some shorts on the tech sector this afternoon. Now we 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.
While today’s action was somewhat bearish, it wasn’t a rush for the exits. I still say the market is waiting for something. Until “it” happens, we are in a nice trading range that can be traded as the market finds its sea legs amidst an ocean of uncertainty.