Tuesday, November 2, 2010

Significant Resistance Dead Ahead

I don't know how the market will react to the election results tomorrow or to the Fed, but I do know that the Qs have reached a very significant resistance zone at the 1.618 extension of the January Range above the January high. Just to point out how important this level is, the low in 2008 was just a little below the 1.618 extension of the 2008 JR below the 2008 January low, a very dramatic year to say the least. In 2009, the Qs moved 4.0 times the 2009 JR, but that was an exceptional year as was 1999. Of course the market can extend higher, but a number of factors seem to be lining up at this resistance level. We'll see very soon whether it is respected or not.

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