Recently, it has broken back into the lower range (below 22,500). The break resulted in a quick 1,000 points drop in a few days and the index found bottom at 21,500 on June 20, 2011. It bounced and retested the 50dma (red line) before being rejected "violently" the past 2 days (another 1000 points drop in 2 days).
This is not the behavior of a strong bull market and you should be careful with your bullish positions. There is currently a big gap between 22,092 - 22,307 that needs to be filled. Assuming there are no significant negative news in the next few days, the index should go up to 22,300 to fill this gap. The key is to monitor the strength (volume) of this gap fill... if it's on low volume, there is strong multi-year resistance at 22,500 (that we discussed above) and it is my view that this level will probably get rejected again.
So monitor these key 22,300 -22,500 levels over the next few days... if market reversed at 22,300 ... consider exiting your long positions.
