The long term rally continues. August was on an outside month. Following an outside month odds are that the market continues higher. The weekly chart below shows a successful breakout above a 12 week balance. The longer the market balances, the more dynamic is the breakout. We have observed this a couple of times over the last year. However, what I am noticing is that there is no distance between the balance areas shown below which usually is a sign of a market that is getting exhausted. At the same time I don't believe that the longer term auction is over and anybody that has tried to call a market top has been on the wrong side of the trade. Note: The all-time high was made in the overnight session. Longer term excess highs are seldom made in the overnight session.
Let's go directly to the Profiles. I see the market coming into balance after breaking out above the 1986 level. That is a key downside reference. The first sign of change will be acceptance below that level. We have a poor high from 8/26 and 8/29. These poor highs increase the odds of the market re-visiting (think "repair") these levels this week. Friday's Value was higher and left a very prominent POC. 1996.50 - which marks the low of the upper distribution from Friday offers short term support. Acceptance above the 2000 level increases the odds of the market making new highs.
Let's go directly to the Profiles. I see the market coming into balance after breaking out above the 1986 level. That is a key downside reference. The first sign of change will be acceptance below that level. We have a poor high from 8/26 and 8/29. These poor highs increase the odds of the market re-visiting (think "repair") these levels this week. Friday's Value was higher and left a very prominent POC. 1996.50 - which marks the low of the upper distribution from Friday offers short term support. Acceptance above the 2000 level increases the odds of the market making new highs.
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