Following the index's completion of the downward margin cycle, we are observing a bounce toward the 1/2 zone, supported by a gap driven by news of easing tensions regarding Iran. Military analysts may attribute this to a shortage of U.S. missiles, while economists will likely point to high Treasury yields as the primary driver.
For our purposes, the critical takeaway is that this narrative may begin to play out. However, we must remain mindful of existing gaps that currently remain unfilled.
Therefore, regarding the index, I will only consider a breakout above the 1/2 level as a valid signal for a bullish move.
The index has moved lower without even attempting to test the 1/2 level, which is a positive sign. We are currently in the 29,000 strike area, which holds significant volume, but should we break lower, I will look for long entries at the margin zone and the 27,500 strike level.
1. Long positions from the current area, with a strict stop-loss below the recent extreme.
2. Long positions at the margin zone and the 27,500 strike area - a strong support level.
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