The market continued higher, as expected. In the morning, we had some sideways moves and rallied toward the end of the day (the media told us that the rally was thanks to Nike… maybe). But we saw a few other technical coincidences that convinced me that this rally was not just because of Nike. The market hit a few significant supports and managed to bounce from them. I think these levels were significant, so if the market sustains the bounce, we will see a rally. Let’s review them one by one. The first level of support happened at the 50% Fibonacci retracement. This was developing the entire week, and we just needed confirmation. That happened today:

 

 

We saw the same bounce happening at the Ichimoku cloud. Also, almost perfect bounce. The price managed to stay above the cloud and bounce off of the support. The only concerning thing could be the blue line trying to cross the red line to the downside, but due to today’s price action, we may see the lines diverge again:

 

 

Our trend forecasting is a mixed bag, partially pointing to the downside, while another long-term indicator points to the upside. The trend shows a possible retreat from today’s gains but should recover them afterward. So, I expect the market to be flat tomorrow.

 

 

Again, do not take it as a prediction of what will happen. The market may react completely differently. I use math to perform trend forecasting based on past data. Trend forecasting may work very well in a solid environment within a given trend, but we currently do not have it. We have an erratic, choppy, and sentiment-driven market. And in such an environment, forecasting may not work well. Other tools must be used to confirm the trend (which is again difficult in today’s market).
 

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