Markets have been trading range-bound over the last few trading days, as should have been expected with Monday's holiday and ahead of the major economic data dump scheduled for tomorrow morning at 8.30 AM EST; traders may consider mentally preparing for outsized volatility.
Should a bout of major volatility occur tomorrow , resulting in a weekly close above $1855 spot – that would be a very high probability indicator that the upward trend is resumed, in my opinion. Is the October low, in fact, just a retest of a major breakout? And if so, did we just put another cyclical bear, in a secular bull, behind us? From a technical perspective, evidence continues to mount that this is the probability. However, as readers likely know from experience, it is easy to speculate about your anticipated outcome – in this case, what about the downside?
Should the current market fail to hold the breakout above the downtrend line and fail to hold the 200-week average , the probability becomes that the bear has further to go; this is not necessarily because it"looks like" '08 but rather because the breakout into a new bull could be a false one, and the opposite move to a false breakout/down could be dramatic.