Longer term view in the $ index is unchanged as the market remains within the 70.70/89.60 range that has contained the market since March 2008. Still view the Nov low at 75.25 as completing a major bottom, with further gains toward 79.95/10, 81.75/90 (50% from the March 2009 high at 89.60) and potentially even an approach of the ceiling over the next number of months (though will surely be good-sized pullbacks along the way). Note too that the weekly macd remains in buy mode (see bottom of weekly chart below), adding weight to this longer term bullish view. Switched the longer term bias to bullish on the Dec 4th at 75.90 (daily close above the multi-month falling wedge).
Nearer term, the market is consolidating from the Feb 1st high at 79.50. With the upside pattern from the Jan 13th low at 76.60 likely not “complete”, email if you need a password) at least some further upside is favored. However, the market appears to be within the final upleg in the rally from the Nov low at 74.25 (wave 5, see numbering on daily chart/2nd chart below), upside momentum is starting to fade (see bearish divergence on the daily macd at bottom of chart) and is nearing longer term resistance at 79.95/10 (38% retracement from the March 2009 high at 89.60). This clearly suggests that risk in the upside is starting to rise with potential for a few weeks/month of consolidating lower increasing. Long from the Jan 27th rebuy at 78.55 and for now, would stop on a close below the 78.55/65 area. However, given the risk that further new highs may be limited, will switch to a close below the bullish trendline from mid Jan once new highs above 79.50 are reached.
