Thursday, November 4, 2010

Qs At Upper Channel Resistance

The upper 50 day by 5.0 Keltner channel stands at 53.41 as of yesteday. The Qs are bid at 53.49 this morning. The next resistance level based on the January Range is 54.66. I cannot find a single instance since 2000 when a top was not seen within 7 trading days after the upper 5.0 Keltner channel was touched. The rally is now 47 trading days long. The April rally topped at 54 trading days while the decline lasted 47 trading days.

The impending top need not be THE top for this rally. It could be a 3rd wave top , but consider the same chart from the 2007 top. We saw 53 trading days and 10.68 points followed by a dramatic 8 day selloff.

It could be different this time, but what is the likelihood that it will be? The risk in this market is high in my opinion.

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