Hitting The Wall

Not unsurprisingly the combination of both medium and long term resistance on the S&P stood up to a first post holiday assault. I’m sure we’ll be revisiting the 2100 mark soon enough but for now it’s shake out time. Patience is key here and at minimum we want short term context to align before attempting any long positions.

This is what I’m referring to. The lower 100-hour Bollinger is currently pointing almost exactly at the daily NLSL at 2082.5. That’s a reasonable spot to grab a handful of longs but should it be breached for more than an hour then expect a ride lower for a retest of the 25-day SMA near 2065. Right now the bullish scenario has the better odds IMO but we need to wait out a bit more activity as we got started late this week.

In case you missed it – here’s the LT context which I pointed out yesterday and apparently it is being observed. For the bulls this is actually a tricky situation as last week’s spike higher didn’t leave behind any medium term context on the way to 2100. Which means the bulls are vulnerable up here until about 2025 (weekly and monthly SMAs).

I’m revising my stance on gold somewhat as it looks like it may just make a b-line higher without a full retest of LT support levels. Alright – I’m game – grabbing a small long position here with a stop below 1215.

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We have a little event risk near the open today, so keep an eye on any USD related campaigns as well as equities to some extend.