Technicals | Dec 08 2023
Bottom Line 07/12/23
Daily Trend: Neutral
Weekly Trend: Up
Monthly Trend: Up
Support Levels: 4300-4200 (zone) / 3808
Resistance Levels: 4638 / 4819 (all-time highs)
Technical Discussion
Reasons to remain longer-term bullish::
→ Elliott Wave count potentially bullish bigger picture via our ongoing analyses
→ still looking to see if 4300-4200 can stick as a strong support zone (one more retest may still be required)
→ interest rates and global political issues remain front and center
→ another strong week, with impulsive price action continuing to sustain
Last night the US ADP Employment Report came in below expectations, and overall reports continue to show easing inflationary pressures. The US economy added 103k jobs, which was below the forecasts of 130k expected. Moreover, the US Trade Balance came in at $-64.3 billion, exceeding forecasts of $-64.2 billion. Nothing overly impressive from a market-moving perspective be it punters are always on the lookout for any data that continues to suggest an ‘on hold’ focus coming into play on interest rates.
Technically everything is continuing to remain on track from a bullish longer-term perspective. Our last couple of reviews though have been calling for a breather and the capping-type process that has been going on over the past couple of weeks has certainly provided backing to this. Last night we also locked in a key outside reversal day to the downside, and as these patterns often witness follow through, in this case to the downside, then last night may be the catalyst for our aforementioned breather to start taking hold.
So in summary our EW count is viewing the immediate move north as an intermediate Wave-3 with these waves frequently subdividing into 5-wave patterns within themselves. So if this proves to be the case here, the first subdivision could now be locked in as part of a minor degree wave-(i) circa 4599, with price now potentially embarking on a wave-(ii) move south as part of an overdue breather. The minimum pullback expected will align a 38.2% retracement which measures in at 4408 which would fill the most recent gap left at 4421. And if we traveled into the more typical 50.0%-61.8% retracement zone circa 4350 to 4290 respectively, then we could witness another gap fill at 4320 take place. This zone would also be part of a retest of strength of our often talked about support zone circa 4300-4200. So price action is continuing to follow the bullish script nicely for now. Red flag only below the support zone!
Trading Strategy
‘From a trading perspective we feel an opportunity on the long side will finally present again IF our proposed breather takes shape over the next week or two. Basis this we will then be on the lookout for either an aggressive swing trade opportunity (preferred) or a more conservative momentum trade opportunity on the long side.’
From a trading perspective, our comments from our last review continue to hold strong. It’s on our radar for a trade on the long side post the proposed breather!
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