First, aside from the strong rally on Tuesday morning, the price action for the last two and a half days has been extremely limited. Traders are obviously waiting for today's employment report.
Yesterday, prices opened higher (a), but quickly fell and consolidated in a downward sloping pennant pattern (b). after selling off and bottoming, prices rose and consolidated in two downward sloping pennant patterns (c and d). However, the overall range of the price action was about a point (15.30 - 16.55). This is a very tight range.
The good news for the equity markets is all the averages have broken through key resistance levels:
The bad news is the markets don't feel strong.
Lumber has formed a strong base (A) and has broken through resistance (B). But there is no strong upward momentum in the chart; instead, prices are meandering at the next highest level.
Copper is still in a strong uptrend (A), which has continued higher after several consolidation areas (B and C). In addition, the EMA picture is strong with all the EMA moving higher and the shorter EMAs above the longer.
