Price is pulling back into a key level around the 61.8% retracement — a zone that has acted as both support and resistance before.
Keep in mind, these are high-beta, speculative risk-on stocks. When they're performing well, it's a strong sign that risk appetite is healthy.
That's why these support zones are potential telltales of what's coming next for equities.
If they hold, buyers stay in control, and the recent weakness is simply a pullback within a strong primary uptrend, leaving the door open for a year-end rally.
However, if these areas break, the primary trend takes damage — and risk appetite will start flashing warning signs.
Let me know what you think. I'd love to hear from you.
And one more thing…
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Alfonso De Pablos, CMT
Director of Research, All Star Charts