A week ago, I noted that price had stopped its decline at the horizontal support level defined by the May 25th low.  Now, this past week, we see in the first chart below here (daily bars) that price has robustly sprung above that level, breaking above R1.  The R1 break means that, on the very short term basis, the previous downtrend has ended.  Furthermore, on a many weeks long timeframe, we see that last week’s low established a higher low compared to late June, so this is likely an uptrend now.

Now look at the second chart here, weekly bars.  We see that the horizontal support identified on the daily bars chart is here quite prominently on the weekly bars chart also, going all the way back to that minor high in late August of 2009, and confirmed at each one of those gray arrows.  So, the fact that price is bouncing up from it again probably means this is a major trend reversal on this timeframe, too, making it likely that we are starting a new uptrend on this intermediate term timeframe.

This coming week, it is very important to watch what price does at the Weekly R2 level, also marked on the daily bars chart.  Looking at the daily bars chart, it seems that price has such upward momentum that it will likely go right up through the Weekly R2 level, confirming the new uptrend on both of these timeframes.  But in the somewhat unlikely event that the Weekly R2 level holds and price turns down from there, then this new uptrend scenario would be in serious doubt.

In my next post here today, I’ll show how the accumulation/distribution behavior is now supportive of a new uptrend.

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