Fake or real breakout?

Yesterday
Well we did get our confirmation in style yesterday leaving the 850 behind with strong committment. I said yesterday the bulls need to make a stand here and they did. I had stressed the significance off the upper range that were closly bundled together from the 850 range towards 870 with many key points in the middle. The 861-862 played a big role and was the bottom at 860.09 right after we gapped open in the morning. We slowly inched towards the 868-871 at 869 in a narrow range until we had our breakout at 1:30.

If you look back at the post on Saturday I said the following:

The breakout can be confirmed using 2 possible scenarios. Either 2 very strong up days on big volume or the second more likly scenario is a strong day towards 857, followed by a distribution day possibly retesting the previous resistance range (840) and then a third followthrough day breaking the previous 857.

On monday we rallied towards 851 giving it the first test followed by an intraday retracement of exactly 50% (Friday low to Monday high). Tuesday we went through distribution with the low of 835.40 that I had called as the low before hand (833-834) and tests at the 850 that were a bit short. Yesterday we had the strength I was hinting at and we followed through breaking all major resistance points. Closing above the key averages of 870 (both 20 and 50) is quite a strong sign.

Now on the cautionary side - while it appears we did break through it was still not on volume levels that give me a 90+% confirmation. We did have a strong day but it was weaker then any of our days last week when we were trading in wide ranges around the 800. So be cautious here on entry for the long side.

Today
We gap opened yesterday without any attempts at a fill, considering the significance of the 850-860 range I foresee that we will see this during normal trade hours. So wait for this retracement to tell us if this was a real breakout.

Looking back at the post from Saturday take a look at the first graph and look at the Nov high and Jan high trendline. Looking at where we are now this trendline will bring is to around 900-904 which we remember as a key resistance range during our early January trade action.

How to trade this?
Well we did get a strong move over the past 3 days so here we can take a breather now and let the market tell us what to do. Remain on the sidelines until the market has settled down and absorbed this move.