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Crossing a Range is Easy 11/21/23

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Clearing resistance is hard. The rally has crossed a range, parts of which the market has repeatedly traded through over the past 7 months. That tends to clear the range of both bids and offers, leaving a thin market that can be traversed easily. 

Now we've reached the hard part, the top of the range. Traders who have bought and held through this rally will enter their sell orders near the top of that range. Dealers will attempt to pre-empt them. Bears will start shorting near the highs. Buying momentum will begin to wane as the market has become extended and overbought. 

I'll illustrate this with a daily chart of the ES, 24 hour S&P futures. 


So we can expect the rally to end any day now. What happens after that, I will leave for the longer term Technical Trader analysis. Before the market opened yesterday I thought that there was Room to Run. Now we'll see. As our old friend LeeWhee reminded us, the more resistance is tested, the weaker it becomes. Now we'll find out if they have the powell to continue probing the resistance enough to weaken it for a subsequent breakthrough. 

Here, our focus is on the day to day, so let's return to the usual look at the hourly chart of the ES.  The 5 day cycle has entered a down phase after hitting most projections. There's a band of spport around 4535 40 that will give us an idea of whether this down phase will go down in absolute terms or just go sideways as a consolidation before the next attempt to break out. 


For moron the markets, see:

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