Monday's Follow Through Confirms the Reversal

After yesterday’s follow through day we can breath a bit easier as the trend works to establish itself. There remains risk that yesterday’s gains will erode today as the day traders have “learned” over the past two weeks to aggressively sell the rallies on the following day. Nevertheless, we believe that prices will become more stable and that the overhead resistance levels on the major indices will once again be tested in coming weeks. This is a market heading for something big. Increased volatility indicates we are heading for a large break out or large break down in the next few months. The charts favor a break to the upside at this point.