Epilogue – 7/7/2021

Yesterday’s script tracked much like Tuesday. We reversed down from a new high at the open but then reversed back up from a parabolic wedge sell climax and waterfall decline that ended at the conjunction of Tuesday’s value area high, the longer-term bull trendline, 5-day EMA, and hourly mean (21 EMA).

We rallied back to the high but entered a trading range for the rest of the day. The trading range was predictable both as a break of the bull micro-channel from the morning and because the price was trying to jump the ’50 handle at 4350, which normally is a bit of a task. Because the day closed near its high and the reversal up was strong yesterday and today, traders will continue to expect at least slightly higher prices going forward.

But after yesterday’s pullback in an 11-day bar bull microchannel on the daily chart, the bulls are probably unwilling to buy aggressively without a week or two of sideways trading. In other words, traders expect higher prices, but not much higher over the next couple weeks.

Targets above continue to be the top of the bull channel on the daily chart, which is around 4,500, and a measured move up to 4,404 based on the 3-month trading range. The bears can get a reversal at any time, but bulls will continue to buy every 1- to 3-day pullback.

A.F. Thornton