Last week's trading range broke to the downside yesterday at 5880 but we failed to see the crucial close below 5880 (sell signal). We use the close (4.30pm) to filter out false breaks and I would imagine quite a few traders went short yesterday at 5880 only to get stopped out on the late afternoon rally. This is known as a ''short squeeze''.
In the absence of a close below 5880 and a failure to make fresh lows we remain patient until this market finally provides a clear signal. One thing I will add is its Tuesday today and this day has a tendency to be bullish when the overall trend is up. So today's action may give us a clue as to whether this recent range bound activity is mearly a flat correction or indeed we are going to see a sharp sell off.
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