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Well, I should have known it couldn’t last. The market was just way, way too fun to trade through July and August. That all stopped after August 21. That may sound odd, since the “crash” (long since forgotten) was on August 24, but the 21st is when things stopped being crystal clear and easy-to-short. It’s been a struggle since then.
Most recently, breakouts have started taking place on various asset classes. The ES sneaked above its resistance level today, and now it’s in the clear for an easy lift to 2020, 2050, or beyond.
So far, GBP/USD has rallied into the 61.8 extension off of our potential wave (i) up for a possible (i)-(ii) i. We are now looking for a wave ii retrace into the 1.5451 – 1.5405 level for a potential entry of a short term long position for wave iii of (iii) up. Initial targets for wave iii com in around the 1.5706 – 1.5751 with targets of wave (iii) at the 1.5823 – 1.5939 zone. Invalidation of this setup comes in with a break under the 1.5294 level.
The bulls had an excellent day yesterday and broke back over the daily middle band. This opens up the upside on a further break over 1988-93 resistance, unless we see a rejection candle today that breaks back under the daily middle band. This would be a rejection candle and would normally reverse most or all of yesterday’s breakout candle. The daily middle band is at 1960 at the start of today. SPX daily chart:
I’m not sure where SHJ is this morning, so I’ll do just a quick comment cleaner. I pointed out on my Tastytrade show yesterday that gold and miners were finally starting to show the potential for strength. Juniors in particular had a nice series of higher lows. That observation seems to be panning out so far this morning, with a 4%+ rise at this point.