Market Notes, April 6, 2010

Summary

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Current uptrend is well entrenched, and shows no warning signs thus far. Being overbought is fast becoming meaningless. Ascending triangle pattern resolved to the upside. Institutional money has rotated into Gold, Oil, and retail sectors in this phase of the uptrend. Classic Market Profile "P" pattern which indicates the market is accepting higher values. The unfilled gap 1173.5 and today's morning reversal at 1175 reinforces the bullish view. Lack of volatility thus far favours higher prices for later this week. Sellers will want to test today's breakout, so a re-visit of the scene of the crime (1175) is likely.
We could also see yet another bull-trap failed breakout pattern like last week. This has actually created the pre-requisite energy for buyers to take the market to new contract hights during this latest uptrend.
Alternatively, if we see a repeat of today's morning dip, I will look to buy just below the gap fill this time. I may also try to play the gap fade if things setup properly.

Euro: 1.3435 is current resistance, but long on a volume breakout above that level targetting 1.3475