My outlook is still bullish, although I currently have no trades opened (I also opened no trades yesterday), so I am looking for opportunities to buy again today. So a break above 10350 is interesting to watch for, a pullback to any of the various levels of support would also be interesting. EURUSD still looks weak, USDJPY is still rallying, SPX is still strong, XAUUSD is still falling and Oil is still recovering, all of these factors support the bullish argument for our index.
I am watching for an entry near to the 10135-10150 zone as an opportunity to go long. If we get a wider pullback, then the move started down at the daily S1 yesterday, which was around 9775 (the bottom of the recent range – a cynical trader/conspiracy theorist may suggest foul play from those capable of manipulating price, in order to wipe out stops, create a bear trap before breaking out of the range to the upside – but that would probably just be crazy talk..) so the retracement zone for this move could be as low as 10,000 or even 9950, perhaps the more likely is 10050.
Let’s start with analysing yesterday and try and understand where we might be heading. Yesterday we printed a bearish engulfing candle on the daily chart and if we look at the last six candles, we have 4 bearish candles, 1 bullish candle and then the 1 bearish engulfing candle of yesterday all in a short-term technical downtrend. I am sure you would agree that this is a pretty bleak pattern, suggesting further bearish movement.