Today’s break above 08-Jan’s 43225 high confirms our bullish count discussed in 29-Jan’s Technical Blog that identified Jan’s sell-off attempt from that high to 27-Jan’s 29340 low as a 3-wave and thus corrective affair as labeled in the 240-min chart below. This resumed strength obviously defines that 29340 low as our new key long-term risk parameter the market is now require to fail below to break the uptrend, confirm a bearish divergence in WEEKLY momentum and expose a major reversal lower. Per such, this 29340 level serves as our new long-term risk parameter from which longer-term players can objectively rebase and manage the risk of a long-term bullish policy and exposure.
On a shorter-term basis, 29-Jan’s 39100 high serves as the minor 1st-Wave high of an eventual 5-wave Elliott sequence up from 29340 and a level the market should not be able to relapse below while maintaining the impulsive integrity of the bull from 27-Jan’s 29340 low. Per such, this 39100 level is considered a short-term risk parameter pertinent to shorter-term traders with tighter risk profiles.
Former 3910-to-43225-area resistance would fully be expected to hold as new near-term support er any broader bullish count.
The daily (above) and weekly (below) log scale charts show the resumption of the secular bull trend and Jan’s interruptive (suspected 4th-Wave) correction. Readers of our analysis know that we identify and suspect such corrective/consolidative events as the prospective initial phase of a slowdown process that typically precedes and warns of a pending peak and reversal. The critical component of such a corrective setback is the specific definition of a low- 29340 in this case- that the bull is now required to sustain gains above to maintain a bullish count. Its failure to do so will, in fact, confirm a bearish divergence in momentum of a scale sufficient to break the major bull market and expose a correction or reversal lower that, in the case of this massive bull, could be equally massive in scale. Until and unless such specific, sub-29340 weakness is proven, the market’s upside potential is indeterminable and potentially extreme as there is no way whatsoever to know how high “high” is. In effect, there is no resistance to this market.
These issues considered, a bullish policy is advised with setback attempts to 43225 OB approached as corrective buying opportunities with a failure below 39100 required to defer or threaten the bull enough for shorter-term traders to pare or neutralize exposure. Commensurately larger-degree weakness below 29340 is required to break the major bull rend and warrant a move to the sidelines by even long-term institutional investors ahead of a reversal lower of indeterminable and potentially severe scale. In lieu of weakness below at least 39100, further and possibly accelerated gains are expected straight away.