Finally, after two months of aimless lateral chop in which the directional jury was out as to whether this sideways price action from 07-Dec’s 252.35 high was corrective/consolidative or peak/reversal, the market has shown at least part of its bullish directional hand by breaking above 19-Jan’s 245.00 high and our mini risk parameter.  This resumed, if still-intra-range strength leaves smaller- and larger-degree corrective lows in its wake at 230.30 and 220.55 that this market is now required to fail below to threaten and then negate a resumed  broader bullish count.  Until and unless such weakness is shown, we believe that 28-Jan’s 230.30 low completed a corrective/consolidative structure from 07-Dec’s 252.35 high ahead of a resumption of the secular bull trend that preceded it.  Per such, these levels- 230.30 and 220.55- serve as our new short- and long-term risk parameters from which a resumed bullish policy and exposure can be objectively rebased and managed.

From a long-term perspective, 03-Jan’s 220.55 lower boundary to the 2-month range has remained intact as our long-term bull risk parameter this market needed to fail below to confirm a broader peak/reversal threat, so longer-term commercial players remain advised to maintain a bullish policy with a failure below that low required to negate that call and warrant its cover.  The market’s rejection of this area in early-Jan reinforced it as a key area of former resistance-turned-support that, combined with the secular bull market so clear in the weekly log chart below, remained consistent with a longer-term bullish count.

Market sentiment/contrary opinion levels remain understandably high and, we’ve no doubt, will eventually contribute to a major peak/reversal environment.  But as always, this technical tool is not an applicable one in the absence of an accompanying confirmed bearish divergence in momentum needed to break the major uptrend.  Herein lies the crucial importance of 03-Jan’s 220.55 larger-degree corrective low and key longer-term bull risk parameter.

These issues considered, a bullish policy and exposure remain advised for longer-term commercial players with a failure below 230.30 required to pare exposure to more conservative levels and commensurately larger-degree weakness below 220.55 to jettison remaining exposure altogether.  Shorter-term traders whipsaw out of directional exposure both ways by the past two months’ chop are advised to re-establish cautious bullish exposure on a setback to 245.00 with a failure below 230.30 required to negate this specific call and warrant its cover.  In ;lieu of such sub-230.30 weakness, further and possibly accelerated gains straight away and to new highs above 252.35 are anticipated.