A quick follow up to my last post. Seems like the weakness I expected never materialised and the market held up quite well at the 1370 Fibonacci line and has completely flew above two resistance areas (marked red and green respectively).
What could be driving the rally? I don’t really know, as far as I can tell, the full economic impact of Covid19 has yet to materialise, so we might see downside shocks moving forward. But then again, the optimism could be coming from news of potential vaccines and perhaps the market looking past all the economic turmoil, straight to where things are rosy again in the future – an extreme version of the markets looking forward, I don’t know.
In any case, for now, I reckon the market will head towards 1470, before pausing. Then we’ll see what happens then.