Sunday Evening 26 September 2010
Short and sweet version. The strong close on Friday confirms the
retest, which took 3 days, and this puts the market in a position to
work higher, [See S & P - Perhaps Another Buying Opportunity, click
on http://bit.ly/9R2yeM, 6th full paragraph]. This was the highest close
since mid-May. Given the amount of time price spent in the trading
range, also since mid-May, a conservative point and figure count says
that the 1300 area is a possibility, while an aggressive point and figure
court says price can reach as high as the 1,500 area. What can be
said about point and figure counts is that they are only guides. They
show potential, but that does not mean price has to go either level. It
just says it can.
Meanwhile, we first deal with the last time price failed and sellers took
control, and that was back in April, which is the first area of concern.
Even at that, there is still the 1170+ area where late April was the last
support area that was decisively broken in the first part of May. The
key is to watch HOW price develops during this next rally phase. Look
for stronger rally bars and weaker reactions.
We placed a stop too close to support and got stopped out of the
long position, last week, but went long again when it was apparent
support would hold.