Last post we talked about the 1652 area. Below was the light I provided to those in the dark. I was also leaning bullish just because the daily candles were closing near their highs. Bearishness was no where in sight.
"We are at a critical price point since a break of 1652.1 resistance will likely lead to a retest of the highs at 1687. So we don't rush in an short here. The prudent move would be to wait for either a break of resistance and a test of that broken support to initiate a long position or a close below today's low 1642 on increased volume to initiate a short. Lets see what happens."
What ensued in highlighted in the chart below. Basically, a large gap right over resistance leaving us sitting on our hands. Stuff happens. We move on and wait for the next opportunity. However, look at the volume and price bar at the blue arrow. Interesting bar. Increase in volume breaking resistance slightly. I know this was at the time of the FOMC meeting minutes which many traders and investors were paying attention to. Did the big boys use this as an opportunity to accumulate shares on news? Well I don't have to guess at what happened. The increase in volume was buying from the big boys vs selling from the big boys to the retailers. This type of buying absorption from the selling at resistance without any really drop will signify that demand is overcoming supply at resistance. Next day they don't even give the little guy a chance to get on board instead they ripped the markets higher.
Thanks for reading.