Market With Some Changes within Defined Range

Weekly Continuation

Last week’s trade was “inside” the prior week’s range and the nearly identical open and close.  Prices continue above the 10, 20 week SMA, on a closing basis for the last two weeks. Resistance is clearly defined by the high of last week and prior week.  If that resistance is overcome expect a test of three weekly highs March traded between 10/19 and 11/02 (3.318, 3.320 and 3.316). Short of that break out event- expect the range trade to be re-in forced between $2.70-$3.00.

Weekly Continuous with Volume and Open Interest

Starting to see some confirmation of the stronger prices as the total open interest and volume has gained over the last two weeks as prices have risen. Have discussed over the last two months about the bias change (bullish) that commenced after the multi-year low that posted at the end of June. Those discussions have centered around the series of higher high and higher lows. One element that has been lacking was the market confirming the bias change with the volume rising and open interest rising simultaneously. The volume two weeks ago was the highest since last March followed up with a strong volume last week. Both those weeks were met with gains in total open interest. Of greater interest is source of the gains– look at the following two charts– notice that some of the volume gains as prices rallied were associated with short covering by the speculative crowd as prices showed strength two weeks ago.

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