$ index continues to chop higher from the Dec 18th spike low at 77.70, with further upward ranging back to 84.00 (Jan 6th high), 84.35 (50% retracement from the Nov high at 88.45 and possibly the ceiling of the multi-week bullish channel (currently at 84.90) ahead. Note too that the daily macd is in buy mode (see bottom of daily chart below), also suggesting at least some further upside ahead. However, the market is likely within an extended period of wide ranging and suggests that new highs above 84.00 may be limited and short-lived (see longer term below). Given the possibly of limited upside potential, not seen as a good risk/reward in just chasing the market higher from here. So instead would wait for a nearby pullback toward 82.30/40 to buy (lower entry price, better risk/reward), initially stopping on a close below the base of the multi-week bullish channel (currently at 81.50, but will want to trail more aggressively on new highs above 84.00).
Longer term as mentioned above, the market may be within an extended period of wide ranging as it “calms down” (at least in the bigger picture) after the last number of months of wide swings. However, there will be good-sized, tradable moves within these broader ranges on a shorter term basis. Best in this type of market to fade the wide extremes or trade with a shorter term view above (see above). Currently as mentioned above, further upside above the Jan 6th high at 84.00 may be limited and not the start of a major new upleg within this broader range (see “ideal” scenario in red on weekly chart/2nd chart below).
