Today's rally was encouraging but the light volume left something to be desired. Yet many times in the past light volume in August has not meant what it does at other times. I was especially encouraged by the fact that the Qs closed above the low of the opening 5 day range after hitting the probable target for the 5 day opening range breakdown.
The opening 5 day range for the Qs was 40.22 to 39.25 or 0.97 points. 0.618 x 0.97 = 0.60 points. 39.25 - 0.60 = 38.65. The August low so far is 38.48, or a drop of 0.77 points below the low of the opening range for the month, (which just happens to be the sqrt(0.618) X 0.97, maybe that means something, but I wouldn't make too much of it). I have found that breakouts from the opening 5 day range (5DOR) tend to be bounded by 0.618 to 1.000 x the 5DOR. Given the close today, we should not expect a close below 38.48 in August, although a retest is still possible.
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