This is the updated chart of the S&P 500 showing support and resistance levels based off of the yearly opening range. The market held the 1500.43 area and in yesterday's rally went right to the 1524.10 target. The next target level is 1547.77. Which group will carry the market to these levels? The energy sector has been a leading sector, and technology has started to receive some analyst upgrades the last few days. Its going to take a group effort to get to that next level. Today is option expiration so volume should be high, if the futures, which are up 10 right now, can hold their gains, it could be off to the next level.
This is the corresponding chart for the Nasdaq Composite Index.
Having been trading from the short side of the market the last few weeks, the opening range system has been a great trigger on when to cover trades and actually go long the market. Buying dips is still the method that is working. As bad as some sell offs feel, they don't seem to have very much follow through. When the market opens following a large down day, it doesn't take long for selling to dry up and short covering and buying to follow. It is a great trading environment. Below are two charts for the intra-day futures from Wednesday and Thursday. The levels are marked along with the opening ranges. A review of this concept can be read here.
It doesn't take to many days like this to make a great month.
This is the same chart with Thursday's range and target.
The next article will deal with why certain levels are real targets and other should be ignored. This is can be a very important edge in the options market and when setting price targets. The slopes below hold some clues. Trade charts that have Fibonacci slopes.
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