Earlier this week, I described picking top days versus range days, and yesterday the markets followed the lines highlighted lines.
The DIA had been confined by a 5-day range until yesterday. Its range didn’t turn out to be a top, but it did provide the trading guidelines we expect from compression patterns.
As soon as it found new-high ground, it never looked back.
IWM, on the other hand, wasn’t able to escape the gravity of its 5-day range, and faded.
Now the SPY, QQQ, and DIA all seem to be comfortable floating at new heights.
The QQQ even encouraged the notable laggard, Apple (NASDAQ:AAPL), to close at a new all-time high creating what looks like a breakout of a roughly 10-day range.
VXX also broke below its multi-day range, further supporting the idea that the markets are content to drift higher.
However…
The markets often follow a 3-day rhythm.
We’ve had 3 days of the market’s pushing higher, and our short-term Real Motion indicators on SPY and QQQ suggest that an O.R. breakdown tomorrow could lead to a trend down day.
I’m certainly not calling a top, but if the markets trade below their 30-minute, they may be looking to check back with the top of their prior ranges today.
Let the bull trend run, but don’t get complacent.