When H&S is Negated*Weekly Chart
Obviously when you look at the daily chart, they do look different but when we look at a big picture looking at the weekly chart and study the sentiment and not so much as a pattern, we can definitely see that once bulls dodge the bullet (massive reversal pattern), they can go wild. With last few sessions action, I am exceedingly bullish in the overall market especially now that financial sector may be negating and nullifying this massive H&S pattern.
I’ve decided to enter call positions @ $20.12 when it pulled back slightly early this morning.
Entered Call Positions @ $20.12*8:35am CST
Gaped down slightly this morning to retest that recent resistance as new support (yellow dotted line) and that’s my entry level as I am exceedingly bullish on the financials since Thursday as I have talked about on this video.
Strong Follow Through
Very satisfied with the close but not too surprised.
And here are few targets for longer term.
Targets: $20.80 and $21.70
You noticed how it bounced few times on that last level of Fib Retracement level last Wednesday and bounced and that’s a very good sign for bulls protecting the possible sell off there. Obviously $20.80 level is going to be very strong resistance because last several occasions, we’ve hit that and we tanked. So if we break above that level of $20.80, I am expecting the bulls to go wild and just take over the trend and bring it up to $21.70 (Fib. 138.2 Expansion level) easily.
I really want to see Financials Sector to make new highs to really confirm this rally on the RUSSELL and S&P 500. I always feel much better seeing financials healthy to confirm the moves on the market indices. With last few sessions bullish move, I am starting to feel so much more confidence to go long in this market but I would feel a whole lot better if $XLF can completely nullify this H&S reversal pattern by closing above $21.
Financials have been really weak and its great to see finally financials are looking much strong along with S&P 500. I am still holding my long positions and my next target is at around $20.80. After 3 straight days of thrust, I would like to see some short-term consolidation pattern such as bull pennant next 2-3 days before going higher. We did fill the gap from 9/23 and that level could possibly act as short-term resistance.
Reduced Positions @ $20.30 & Holding Remaining*1:33pm CST
I’ve decided to book some profit earlier today but I am still long and holding remaining positions as the trend is still up. Today’s candle can be categorized as “bearish harami” which is weaker form of reversal pattern which that needs absolute follow through next day for it to play out. It means we would need another bearish day for the bearish harami to play out (and close below $20.07 for confirmation to the downside). I think if we can stay above $20.20ish and form some kind of consolidation pattern such as “bull pennant”, I think we can have higher prices.
$20.83 next resistance, obviously, and I am wondering if we can break above that level and consolidate for higher prices or is this the end of the bull run. I guess we will have more lucid direction tomorrow. Still holding remaining long positions.
All Positions Closed with Gain @ $20.74
I do think we can go higher if we can clear that $20.80 resistance but I am closing the positions and decided to book profits, mostly because I am still holding pretty heavy positions on $SPY and don’t feel like dealing with that $20.80 resistance. I might think about getting back in if we can clear that resistance but for now, I am happy with the gain.