We had a very interesting continuation gap on Tuesday. Feb 13th, 2007. YM gapped approx 40pts and took off to close at 12687.
Here is an interesting YM 10 minute chart using fibs:
YM gapped and tested the 50%-61.8% zone which held as support. This tells me that the decline from Friday is no longer valid. However, this could actually be a short squeeze. The next line of resistance will be Fridays high at 12703. This will be a key price level.... if it can not break, it will probably reverse back down to fill the gap at 12585ish or at least to the
VPOC at 12595.
Now to the upside, the ceiling gets thin and I find it hard to design a trading plan when it starts making new record highs.
We have a
VPOC at 12722 and also the high from 2/7/07 at 12736. Anything above this level and.... I would start looking at daily, weekly, and monthly pivots.
Couple key levels to watch for at the open:
Resistance
12703: watch for reversal here.. will be BIG
12725 - 12735: I may fade the first attempt to 12735. But any valid breakout above this will be strong.
Support
12663: as always the
POC
12640: any break below this will probably take it to the
VPOC at 12595 or a possible gap fill