Sunday, July 3, 2011

SNP Start of the Week Analysis. Preopen 7/3

(Chart 1 - SNP Daily Zoomed)
(Chart 2 - SNP Daily)

Wow, what a short covering rally. Every day took out resistance after resistance, as the shorts fell over each other to get out of their positions and start the long weekend.

That being said, it is now approaching a likely stall zone.
1345-1350 (in the september snp mini future contract on the CME) is setting up to be an area of superior resistance.
1347.5 is a 5/8 M.M. line and the top of this sector's trading range.
We also have the low of an old and very strong bullish channel (light blue) that we broke out of on Jun 1st. If we rally into it, it should provide a good place to sell.

As you can see, both of those intersect for the Monday session.
I anticipate we will rally into it, and probably past it a bit.
When we get near it, look at 30/60 min charts for price action to indicate strong selling is indeed occurring at these levels (shooting stars, bearish engulfing, etc). If it is, I advise getting on board.

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