Equity indexes and commodities rebound

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Commodity prices stabilized further in Wednesday's session after sharp selling earlier this month brought gold, silver, and oil crashing into support two weeks ago. Gold rose 1% to $1,495.60 an ounce, while silver settled higher by 4.8% at $35.09 an ounce. Crude oil was up 3.3% on Wednesday to $100.10 a barrel after the weekly oil inventory report showed lower-than-expected U.S. crude oil supplies.

The rest of the market continued its trend of trading roughly in sync with the commodities, although without the extremes. The indexes were lower in premarket trade, but held the daily support at 50- and 100-day moving averages in the major indices following a 2-wave correction off highs on the daily time frame. The open was spent shifting the premarket momentum and by 10:30 a.m. ET the bulls had a firm grasp and kicked off a second wave of buying following Tuesday's mid-day lows off the daily support.

Dow Jones Industrial Average

All of the setups intraday in the indices were on the buy side. The trend remained strong, albeit somewhat choppy, throughout the day. It wasn't until the 14:00 ET correction period that we started to see the market begin to falter. By that point the index futures were striking strong price resistance at previous highs, congestion, and even equal move resistance levels. The equal move resistance can be seen clearly on the 15 minute charts in blue. Since the pace of Wednesday's rally was comparable to Tuesday's, that type of resistance held extremely well.

Despite the afternoon resistance, the bulls still held onto the gains afterhours with only slight price correction in the early-morning hours on Thursday. This congestion along highs sets the tone for the third breakout higher into Thursday morning. The highs from May 15th are the next major Dow (YM - 12,600 zone) resistance intraday, while the highs from the 13th are the next resistance in the S&P 500 (ES -1350 zone).

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