Fri’s break above last Wed’s 3929 high reaffirms the secular bull market and leaves last Wed’s 3878 low in its wake as the latest smaller-degree corrective low this market is now minimally required to fail below to even defer, let alone threaten the bull. In this regard this 3878 low serves as our new short-term risk parameter from which shorter-term traders with tighter risk profiles can objectively rebase and manage the risk of a still-advised bullish policy and exposure.
Former 3929-area resistance is considered new near-term support.
Only a glance at the daily (above) and weekly (below) log scale charts is needed to see that the trend is up on al scales and should not surprise by its continuance or acceleration. And since this market is again establishing new all-time highs, there is no resistance. The ONLY levels of any technical merit currently exist only BELOW the market in the form of former resistance-turned-support (like 3929) and prior corrective lows like 3878 discussed above and 01-Feb’s 3656 next larger-degree corrective low and ley risk parameter pertinent to longer-term players and investors. The only levels that exist above the market are the so-called technical levels “derived” from past data points. And as we all know for sure, these derived levels like Bollinger Bands, channel lines, imokus, the ever-useless moving averages and even the vaunted Fibonacci relationships we cite often in our analysis NEVER have proven to be reliable reasons to identify resistance (or support) in the absence on an accompanying confirmed bearish (in this case) divergence in momentum. And they never will.
These issues considered, a full and aggressive bullish policy and exposure remain advised with a failure below 3878 required for shorter-term traders to move to the sidelines and commensurately larger-degree weakness below 3656 for long-term players to follow suit. In lieu of such weakness, the trend is up on all scales and should not surprise by its continuance or acceleration.