ST trend: up (with potential topping pattern)
Yesterday we had a huge reversal day and up squeeze. FGSI and IGSI both signalled an unconfirmed low at the o/n LOD, and those have the potential to be explosive set-ups. Yesterday didn't dissappoint, for sure. After the o/n LOD was touched, the market went straight up with little to no pullbacks. During RTH we had a drop and retest of macro-ML, but that was quickly brushed off and mkt rocketed to new highs to close near HOD.
The o/n was perfect for buyers. We had almost no pullback with price going only sideways after which another push higher started. FGSI is starting to show extreme overbought conditions as price is pushing into sell zones, but the buyers seem very determined and just push higher and higher. Sellers on the other hand are VERY inefficient, tiny pullbacks in price lead to big declines in FGSI, which means they are likely to continue to get squeezed. The 1st step for sellers would be to break below the danny line. As long as that holds as support, the immediate up trend is intact. Once danny fails a pull-back to back-test ML would be expected. There we will have the next big inflection point. If the newly found up trend is to be kepy, ML needs to hold. FOMC today, which should provide fireworks, large moves expected. As usual the "real" direction after FOMC will be seen only tomorrow and with this week being OPEX, that just means more volatility and wild swings in both directions expected.