For the past 2-1/2-months the market has generally wafted laterally, presenting a correction-vs-reversal debate and challenge. With Yesterday’s recovery above 06-Jun’s 18.43 high and our key risk parameter, the market has confirmed the price action dating back to 12-May’s 18.25 high as a corrective/consolidative event and reinstated the secular bull trend from 28Apr20’s 9.21 low. The important by-products of this resumed strength are the market’s definition of smaller- and larger-degree corrective lows at 17.77 and 16.73 that it is fully expected to sustain gains above to maintain a more immediate bullish count. Per such, these levels serve as our new short- and longer-term risk parameters from which traders can objectively base and manage the risk of a resumed bullish policy and exposure commensurate with their personal risk profiles.
Two-and-a-half months of former 18.50-to-17.90-area resistance, since broken, is expected to hold as new near-term support ahead of further and possibly extended gains.
On a broader scale, since the secular bull trend has resumed, previous peak/reversal-threat elements like waning upside momentum, historically frothy bullish sentiment and a potentially complete Elliott sequence are relegated to the back burner and will not be considered applicable to another peak/reversal threat until and unless the market proves weakness below at least 17.77 and especially 16.73. Indeed, the monthly log chart below shows NO levels of any technical merit above the market shy of Sep’16’s 24.10 high. In effect, there is no resistance. This does not mean however that we’re forecasting a more to the 24-area. But it certainly does mean that until and unless the market fails below the recent corrective lows and risk parameters we’ve identified, the market’s upside potential is indeterminable and potentially extreme, including a run at 24 and higher.
These issues considered, traders are advised to return to a bullish policy and re-establish at least cautious bullish exposure at-the-market (18.59) with a failure below 17.77 required to threaten this call enough to warrant its cover. In lieu of such weakness, further and possibly accelerated gains straight away should not surprise.
