Having said that, we poke above there and then pulled back below it again, as we continue to see a lot of noise in this general vicinity. Whether or not we can break out to the upside on Friday might be a completely different question, because the weekend has a lot of people jumping out of the market in order to protect their accounts. The market closing at the highs of the week is a very strong sign, but I cannot help but notice the market slipped a bit at the end of the Thursday session.
If we do break down below the bottom of the last several candles, then it is likely that we could go looking towards the 50 day EMA and the uptrend line underneath that could come into the picture and offer support. At that point, I think it would only be a matter of time before buyers would come in based upon “cheap pricing.”
If we do break down below the 50 day EMA and the uptrend line, then it is likely that we could go looking towards the 4200 level, followed by the 4000 level. The 4000 level is my “floor the market” when it comes to the overall trend, and if we break down below there it is very likely that I would be a buyer of puts, but I certainly do not short this market because it is a great way to lose money. At least with puts, you know how much you can lose. Having said that, I do not expect it to happen anytime soon, so I am going to be more along the lines of a buyer of dips and anything else. If we break out to a fresh, new high, that only extends the overall bullish attitude of the market that we have seen. When you look at this chart, you can make an argument for a bit of a channel that we are in, but obviously it would be very sloppy to say the least. Ultimately, it certainly looks as if we are still in a huge uptrend.
