Yesterday's continued rally leaves Mon's 140.75 low in its wake as the latest smaller-degree corrective low it now needs to sustain gains above to maintain a more immediate bullish count. Its failure to do so would break the short-term uptrend from 28-Dec's 132.85 low and expose an interim correction within what we'd believe to be a broader base/reversal process. Per such this 140.75 level is considered our new short-term risk parameter from which advised cautious bullish exposure can be objectively rebased and managed by shorter-term traders with tighter risk profiles.
The daily (above) and weekly (below) log scale charts show an absolute textbook example of the elements we always look for in a base/reversal-threat environment:
The extent and impulsiveness of the ensuing rally totally confirms and reinforces our bullish count introduced in 04-Jan's Trading Strategies Blog and warns of a larger-degree correction or reversal of Nov-Dec's 179.55 - 132.85 collapse. The market this morning eclipsed the (149.05) 38.2% retrace of this recent plunge and has further ad possibly accelerated gains ahead as the daily chart above shows NO levels of any technical merit between spot and Nov's 179.55 high.
These issues considered, a bullish policy remains advised with weakness below 140.75 required for short-term traders to step to the sidelines and further weakness below 132.85 for long-term players to do the same. In lieu of such weakness we anticipate further and possibly accelerated gains straight away.