Additional support was provided by $4,481.78, which is the line that separates the bull market from the bear market. Recapturing the long-term Fibonacci level at $4,541.88 also contributed to the rally.
Crossing the swing top at $4,660.59 is also contributing to the rally. But that’s just a change in the minor trend, or momentum, not a breakout of the main trend.
On the upside, I see headwinds at $4,744.34, a long-term 50% level, but also the last resistance before the all important 50-day moving average at $4,799.94.
Conditions will turn bullish if the 50-day MA is overcome, but we’re not likely to see a major breakout rally until the retracement zone at $4,850.68 to $5,028.04 is overcome by strong buying.
Passive traders bought the dip, and what I mean by that is they were looking for support to get value. Don’t expect a breakout to the upside until the active traders come in and start taking out offers. Until that happens, we’re likely to remain rangebound, but with today’s strong rally, watch the reaction to the 50-day moving average at $4,799.94, that will set the tone.
