7320's Undigested and 7640's Untested
Battle between the two ranges
Good afternoon,
We had quite the week this past week, with markets tagging 7622-7632 but stalling a 3rd time to eventually finally take out 7520’s and vital support at 7506-7508-7512 areas. This then triggered the break beneath our major weekly support ranges of 7471-7478-7481. Initially, we did a great job sustaining above 7571-7578 which was vital to sustain zone bound territory (7588-7632). But after a final attempt, major ranges were broken (7508-7521) and 7479-7481 massive core area failed to retrace (this was the large area required in the past for bull continuation to continue - extremely calculated range).
This resulted in immense volatility all the way back beneath 7401-7410-7412 and all the way back to our big spots near 7366-7371-7378. We already are well aware how huge 7354.75 support is extremely calculated area and that triggering that is the first step towards those 7320’s that have yet to be digested properly. We were well aware of this risk for several weeks now and know that the markets will eventually have to return here in order to balance but the question was when? Stalling 7632 made perfect sense considering we had opened at 7595 versus 7608-7612 at a minimum. Not trigger our big 7644 area (annual ranges) implied the market was not yet ready to commit to mass continued expansion scenarios and that range could then be recycled back down and extensions can be delayed.
But what does this mean for the week ahead? Well, there are a lot of things to factor in before we look further out. For one, we did return back to 7368-7371 but avoided 7354 and full reversal back to 7320’s. We know we still eventually need to digest 7314-7322-7328-7332 and balance that area. We are also aware that the bigger area to lose (on downside) is our calculated spots near 7301-7308 and so on. We discussed this several times previously.
The big area of major structural risk is actually our acceptance area:
• 7305-7309-7311
What kind of conditions do we need to look for this week? And specifically for our big flip date on June 8th? How crucial is this date and specifically in terms of triggering downside range OR negating risk and retracing back upside? This seems like a clear battle to start the week of core to core - 7320’s - 7370’s -7420’s -7470’s.