Looking Towards One More High

In last weekend's report we wrote:  "Price is however getting into a range where some longer term supply can be expected to come into the market - if you look at the earlier 2022 period, 4600/4650 is the area where we have a lot of resistance coming in. So it makes sense that we are nearing some kind of bigger pullback taking place very soon. I think though that we can get one more push higher before that happens.. Maybe somewhere into the 4600/4650 area and then a bigger correction in the fall timeframe."

What actually happened is that the market hit 4634.5 and sold off from there before rebounding on Friday.  We were more or less rangebound over the week with price first hitting new recovery highs after the Fed and then selling off from there before again rebounding on Friday.  Our Odds Indicator went to a sell signal very near the highs and few of the short term internal indicators have also been joining the sell side.

Looking ahead, price action is bullish/neutral short term, bullish medium term and bullish long term.  While price action by itself still looks bullish, as I noted in the previous updates as well we are in an area where we can expect some significant supply can come into the market, especially if we look at the early 2022 period.  The 4600+ area is where we chopped around for a while before breaking down. I think we can attempt one more high toward the 4650 area before a more meaningful correction sets in. On price, 4615/20 area is resistance on the upside, and 4580 area is support on the downside.

Grey zone resistance at 4611–18 and then 4629-35. Support is at 4582-74 and 4561-53.

For Monday, daily pivot is at 4594. Resistance R1 is at 4630 and R2 at 4652.  Support S1 is at 4571 and S2 at 4535. 

All the best to your trading week ahead.

Princely Mathew hosts The Smart Money premium service at ElliottWaveTrader.