The first important range is $4382.62 to $3942.10. Its retracement zone at $4162.36 to $4214.34 is resistance. It stopped a rally on July 6 at $4202.71. Taking out this swing top will change the main trend to up.
The second range on my radar is $3942.10 to $4202.71. Its retracement zone at $4072.40 to $4041.65 was tested successfully last week although the market dipped to $4021.81 before rebounding to $4138.06.
Bearish traders are going to try to press prices through $4041.65, in an effort to pull-away from the $4202.71 swing top, aiming for a retest of $3942.10 and beyond.
Bullish traders are trying to create a secondary higher bottom at $4021.81, which is the normal precursor to a potential change in trend. To put it another way, $3942.10 to $4202.71, the first rally, was short-covering. The second rally is usually a combination of new buyers and lingering shorts. Counter-trend buyers are also trying to create the upside momentum needed to take out $4202.71, and change the main trend to up.
That’s our early focus for next week, resume the downtrend under $4021.81 or change the trend over $4202.71.
Until the market changes the trend to up, we’re not too concerned about the moving averages although they are trending lower.
What to Watch
Source: Original Article
