We find ourselves in that same general vicinity now and it looks as if breaking above the $106,000 level might be a bit difficult. Breaking above $106,000 could open up an attempt at $110,000, but I look at that more or less as a thick zone of selling pressure and supply. If we can get above the $110,000 level, then I think we really start moving to the upside again.
In the short term, due to the overextension of the rally, we will more likely than not do one of two things. We’ll either go sideways and use time to work off some of the froth, or we will pull back towards that $100,000 level again, possibly even as low as $96,000 in order to offer enough support to entice new buyers. All things being equal, this is either a buy on the dip or buy the breakout type of market from what I see and have no interest whatsoever trying to be on the short side of this trend.
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