The January Range

With January in the bag we can calculate the January range and project support and resistance levels for 2010. But first let's look back at 2009 and see how well the 2009 January range projected levels worked out.

For January 2009 the range (high - low) for the Qs was 31.63 - 27.96 = 3.67 points.

March 9 low at 25.63: 27.96 - 25.63 = 2.33 pts, 2.33/3.67 = 0.635 X JR ~ 0.618 X JR

May 6 high at 35.34: 35.34 - 31.63 = 3.71 pts, 3.71/3.67 = 1.01 X JR

June 11 high at 37.23: 37.23 - 31.63 = 5.60 pts, 5.60/3.67 = 1.53 X JR

August 28 high at 41.08: 43.82 - 31.63 = 9.45 pts, 9.45/3.67 = 2.57 X JR ~ 2.618 X JR

December 4 high at 44.73: 44.73 - 31.63 = 13.1 pts, 13.1/3.67 = 3.57 X JR ~ 3.618 X JR

January 11, 2010 high @ 46.64: 46.64 - 31.63 = 15.01 pts, 15.01/3.67 = 4.09 X JR ~ 4 X JR

As you can see most of the major swing highs and the most recent high hit on round number or fibonacci multiples of the 2009 January range.

For 2010, the JR = 46.64 - 42.63 = 4.01 points.

We should expect significant support at the following levels:

0.618 = 2.48 ==> 40.15
1.000 = 4.01 ==> 38.62
1.618 = 6.49 ==> 36.14
2.000 = 8.02 ==> 34.61
2.618 = 10.50 ==> 32.13

The top 4 levels are also near fibonacci retracement support of the rally from the March 09 low, so these are the primary levels we will be looking at for support during this correction.

We should expect significant resistance at the following levels:

0.618 = 2.48 ==> 49.12
1.000 = 4.01 ==> 50.65
1.618 = 6.49 ==> 53.13
2.000 = 8.02 ==> 54.66
2.618 = 10.50 ==> 57.14
4.618 = 18.52 ==> 65.16

Based on the above calculations, I expect the first significant support for the correction will be in the range of 40.15 to 41.05.