Once again, we remained in the tight range Friday from 24,400 to 24,800. Tight ranges are beautiful because the break can be so obvious. With the 3 day weekend behind us, I would expect a solid break to occur tomorrow. From there, we need to watch the major levels that are marked in the charts.
DJIA – 15 Minutes
The Daily Chart continues to show a solid consolidation with clear support and resistance boundaries. The wide consolidation implies a move up to 30,000 – but that would be in a normal market. This is anything but normal. However, once we see a solid break through 24,800 (up) or 24,400 (down), the market should follow through.
DJIA – Daily
Commentary: Friday, we once again saw a market that is hesitating. When is the Day of Reckoning? When the DJIA breaks 23,000 (down). A solid break of 24,800 up will tell us the market is going higher – at least short term, But a break of 24,400 will indicate short term weakness. Then, we need to start watching 23,000. As long as that level holds, we should see more upside.
This is definitely a market that wants to go up. But we all know, “You can’t always get what you want.” I firmly believe this market is going to come to terms with reality at some point. In the interim, there can be huge profits trading in the direction of strength. Whether that strength is due to actual bullishness or because the Fed is buying the market, we can’t know. If it IS the Fed, there is a point where stimulus runs out.