If you’ve done any reading related to the market lately you no doubt know the importance of this week. Odds are good that we break out of the range (about 3 points) we’ve been in recently as some powerful catalysts are on tap. If I had to guess (of the FOMC, elections and non-farm payrolls) I’d say the FOMC and their statement about quantitative easing will have the biggest impact.
Below is a chart of weekly candles and one upside target that stands out to me is the 61.8% fib level at 122.98. For a downside target I see the 101.64 level (38.2% fib) which was tested and held nicely. Going into the week my overall Delta is positive but I’m looking to unload some of that by Tuesday/Wednesday to get back to a more neutral level. However, seasonality suggest upward momentum and until dips are no longer bought the upside targets remain attractive.
The weekly price targets of Dr. Steenbarger could come into play with the catalyst available. I say this because it’s been many weeks since these price targets have shown any relevance. This is mainly due to the narrow range that we’ve been in. Hopefully you have a plan of action for this week and you are prepared to act proactively.