Bias: The move lower this morning is suggesting a more bearish day today
The rising channel low was broken briefly yesterday and this morning's weakness is threatening to follow-through. Thus it would be safer to wait for confirmation of gains. The first resistance is at the 136.80 pivot area and back above here would provide relief towards the 137.32 high. Break here would be final confirmation of stronger gains back towards 138.15 at least. Take care as this could cause a pullback. Once complete look for further extension higher above 138.48 to the 139.21 high. Above there lies further resistance at 140.00 and 140.56 which seem modestly firm.
9th June: We have been toying with the rising channel low and yesterday's 135.96 low must hold to keep any chance of a stronger push higher. Back above 139.21 would confirm 140.00-56 at least. Also note resistance at 141.68.
The 136.25 channel low was broken but then saw a pullback into the channel again. If yesterday's 135.96 low breaks then the risk will be much lower. Minor support is seen at 135.28 but I suspect that a bearish move should move quite quickly to the 134.05 area and possibly as far as 133.40.
9th June: We can now raise the reversal level to 135.96 - break of which will generate much stronger losses down to 134.05 and 133.40 en route the 126.96 low.
For a full description of how to use the analysis please see the Analysis page of my website. The prior day's set ups for potential trading levels highlighted in the report are now available on the Daily Forecast page of my web site.
I shall be presenting a seminar in Hong Kong on Saturday 27th June at the Excelsior Hotel in Causeway Bay. Please see http://www.earlthorn.com/ for details.