Normal Service Resumes

After the shockwave of last week's big dump on Thursday, the bulls have answered with two winning days on the XJO, putting the index back above 5,050.

A spinning top was printed last week on the weekly chart, indicating indecision. 4,962 is the support level to watch in the short-term, as well as the recent cross in the 50WMA & 100WMA, which may help to provide support.

The daily chart shows 4,969 acted as resistance-turned-support, and in tandem with the support of 20DMA, the XJO was able to push back past 5,000. Price action now sits in the middle of the uptrending channel which has been preserved amidst the increase in volatility over the past few trading days. Stochastics are seeing a move towards more neutral levels, and MACD momentum is slightly with the bears at present. On a DeMark indicator basis, last Thursday would have been the point for a bearish price flip and today would see the TD buy setup extend to 3. Overall, there cannot be a comprehensive case made for a clear move in either direction.

 

The hourly chart shows a violation of the uptrend dating back to early January. Price action is struggling to reclaim the higher ground above trending support - the next few days may provide a better indicator of whether the support line will turn into resistance.