After the brief pull-back from 2 weeks ago, last week saw the bulls come back with a vengeance. And they managed a week for the history books, the market closing higher every day in the past week, after opening with a gap up on Monday. Such a relentless push up brought many indicators into overbought territory, the question now being how long can the market stay this overbought before correcting.
The interesting thing is that the weekly cycles triggered a resistance level in the form of an END, which could mark the end of the up impulse. YM didn’t trigger a resistance yet, which could mean that the market can go slightly higher, but the normal expectation is still for the market to at least pause the upside here and start a correction.
The daily cycles decisively broke above resistances and YM is already in an impulse up. ES will confirm the up impulse shortly as well, which is a pretty big warning for shorts. The directionality tool on YM is pegged at the highest level and if it pulls back that would be a clue that a correction might start.
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