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All is ready for the new all time highs, again.

ByAlpari Research & Analysis
AuthorTomasz Wisniewski
Published 08/07/2017, 06:31 AM

Indexes start the new week with an optimism. Well in case of the American indices, we actually could have said that every Monday for the past few years. Maybe this time is a bit different as we are straight after the NFP data, which was shown before the weekend. After the turmoil and volatile movements caused by the NFP, we finished the day more or less on the same levels as we were before the publication. We can see that after the weekend, when we had an occasion to digest that number, bullish approach is more visible.


SP500 quickly attacked the local highs from August (blue resistance), showing us that the Friday's breakout from the pennant was not a coincidence. For some traders, that formation was a pennant and for some (pessimists) it looked like a head and shoulder pattern. Breakout of the upper line favoured the first option. Currently, we are knocking to the closest resistance on the 2482 points (blue area) and the chances that it will be broken soon are high. There are no questions about what the overall sentiment is. We are in the channel up formation (pink lines) and we had loads of important supports underneath ( 2465, 2452, lower line of the channel up – dynamic and others).


As long as we stay above the lower pink line, the buy signal is on the table. Many traders that love reversals and going counter trend may feel frustrated. I know what you feel but the reality is that from the technical point of view there are no signs for a possible reversal, yet. When playing the odds game here, the chances that we will make new all time highs are much higher that the chances for a reversal. An as long as the trading is the game of probabilities, we should stick to that winning side of the market. SP500 H4

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