Higher lows typically lead to higher highs, it is a classic momentum reversal pattern. The fact that this structure is forming within a major is a sign. The confirmation of momentum is when price pushes through the 11871 to 12316 zone which is the .618 area of the most recent swing. IF this market breaks 13K , it will signal higher prices to come.
I am not short, but if I was, I would certainly be tightening stops or simply looking to get out. My position is long and my average price is around the mid 12Ks. I am still looking to lock in some profits in the 15K range. What about buying more? If you are not long yet, prices are still attractive for swing and position trades long. For swing trades, risk can be defined by the 10276 or 9900 lows which serve as reference points for stops. These stops may seem wide relative to current prices, but that is the nature of the structure in place at the moment. Taking long positions in this area has to be done with careful sizing in order to keep risk under control.
IF the market tests the lows once more (which can happen) I will be looking to add more to my position upon the appearance of another . Again I do not know if this scenario will occur, but if it unfolds, I am prepared to take action. The prices that I have in mind are the 10534 to 9989 area (.618 of minor swing) or the 9683 reversal zone boundary.
In summary, I can understand why some less experienced traders think this market is . They are too focused on the small picture. Not only is the big picture technically still , but we are in an expanding business environment which will keep these markets generally supportive. In such conditions it is better to buy near lows and hold for the next bull run which can lead this market back to the 16 to 17Ks without much effort, it is just a matter of the right catalyst. Effective positioning requires the perspective to buy when the herd is still and sell when the market starts pushing into resistance zones. Most importantly you must have a perspective and plan your decisions around a small number of well defined scenarios, and then let the market choose. That is a great way to separate from the herd and capitalize on its impulsive nature.
Questions and comments welcome.