OK, this is just getting silly. As of this writing, this is the FIFTH time the /ES has approached 2825 and been repelled (I emphasis “as of this writing”, because I realize it could blow right past it at any moment…….but still!)
The astonishing thing is that ostensibly a big part of the reason for this lift is “trade talk optimism”, but Trump has all but said there’s not going to be ANY deal at this point……….and the market couldn’t care less! I wanted to offer a couple of thoughts about what happens if we do, in fact, cross that proverbial line in the sand.
The yellow zone I’ve tinted above runs from 2825 up to 2865, a 40 point range (the math checks out). This is the “super easy” range for the bulls, because there’s absolutely nothing stand in their way in this range. That entire zone is merely part of the glorious drop that happened back on October 10th (which feels, oh, like about 27 years ago).
If and when we get to 2865, then it gets tougher for the bulls. A lot tougher. There’s a meaningful amount of overhead supply spanning up through about 2950. Of course, if the bulls manage to push things past that point, forget about it. 3,000 and beyond are on the way.