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Strong Resistance Clusters Awaiting the Robots - June 22, 2011
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The upside move was so strong yesterday that it will likely need some digestion before a follow-through can ensue.
At least, that's what the clusters are suggesting for today's outlook. Both robots are giving neutral signals for today's new entries.
Yesterday I wrote that IWM would need to close and then open today above QS1 (79.32) for the best scenario. Well, we got an even better scenario with a close at DR3 and an open today that will be well above QS1.
This is excellent action that was probably fueled by a lot of fast short covering reflexes, but it left IWM just below a rather strong resistance cluster with strength of 14. With the 50-day moving average declining and joining soon the same cluster, IWM will need to attempt this breakout by leaps and bounces otherwise known as choppiness. Ideally, it should end the week just at or below WR3 (81.98) and the 50 dma to indicate that the resistance is not attracting new short sellers. The support cluster is relatively strong too, but doesn't really show any strength before the confluence of WR1 (79.53) and QS1 (79.32) that need to hold for an imminent bullish assault of the 50 dma to become a possibility.
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GDX has a strong resistance cluster of 17 including the Yearly Pivot (55.19) that doesn't bode well for today's session.
I need to rest my eyes and will be away from the screen most of the day.
Billy
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