Good Morning all.
I’m just returning to my office after a weekend trip.
The market is giving us an open which is outside of value and range of friday.
There are large possibilities for a directional move in either direction.Quite simply the gap up is a buying tail, indicating the presence of buyers who want to take the market higher. But we also know that we are reaching zones of known supply brought in by intermediate term sellers.
Expect the market to auction here for a while.
I’ll be back with some charts and updates…
Often a question is raised on how to measure the strength or resistance of a particular level.
As you know, our levels posted here are completely price-volume based, ie, there are no trendlines, moving averages etc to measure them.So how do we know a particular level will hold or not.
The answer is always in the price reaction.
For example, the level of 5372 given as a resistance has held up so far. The high is 5372.45 and the reaction off that level has measured 10 points so far, which is average.
Now an inability to get a bigger reaction off 5372, i.e more than 10 points, will mean that the level will not hold.