There is a lot of talk coming from market pundits basically stating, ‘At some point, the market MUST pull back.’ While it is perfectly obvious that this is a true statement, it is not particularly helpful to anyone because of its utter lack of specificity.
The market will pull back when it reaches levels where the buyers are not as eager to buy and/or the supply provided by the sellers overwhelms them. Looking at charts of the stock index futures below, we have identified the levels of support that if breached would signal that the sellers are overwhelming the buyers in the near-term.
In current market context, we would only anticipate a pullback if these levels of support are breached (yellow arrows below):
In the ES, the key level of near-term support is 1981 – 88.
In the NQ, the key level of near-term support is 4029 – 54.
In the TF the key support level is 1159 and then 1143, if 1159 is breached.
In the YM, the key support level is 16,962 – 17,001.
While above these levels, the upward bias remains intact. If these levels were to be breached, the next decline, or pullback of significance, would be signaled as underway.
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