Hey Traders,
very signifiant week in the markets technically. Regardless of this being biggest 4 week advance in the markets sine 1933, charts suggest that there might still be some room on the upside.
esdaily1ES emini futures have managed to close above fib confluence zone at 832.75 with authority on two consecutive days, after taking out the trendline connecting November and January highs there really isn’t much upside resistance to reaching 883.5 conservative target for this rally (see Rally Target post, chart below)
Weekly charts managed to produce 2 green trend candles for the first time in over a year, suggesting new longer term could be starting.
esweeklyEven though there is still some room on the momentum chart, Weekly momentum has not been at such overbought levels since October and November of 2007.
Regardless of the large advance it seems that not many traders are buying into this rally as indicated by NYSE bullish sentiment index:
sentimentThe same people who are continuously trying to sell into this rally could fuel further squeeze to the upside, with possibility of us reaching important retracement target, extreme overbought momentum levels on the weekly chart and overly bullish sentiment reading all at the same.
All that being said, this market could roll over and head for retest of the lows starting Sunday night, but the charts at the moment are suggesting more upside is in store.
Have a great weekend
Vlad