QQQQ, SPY, IWM, DIA Resistance Levels-Heavy Resistance Above
Posted on June 8, 2010 by Pro Picker in EXPLOSIVE STOCK SETUPS(premium), GLOBAL CHART ANALYSIS
We got a nice reversal off the lows on Tuesday which seemed to be good news for the bulls but after further examination, today wasn’t as positive as it looked.
The S&P 500 and Dow both had big bounces off the lows of the day with some decent volume but neither one of them could even reach the top of Mondays range let alone get back much of Fridays big loss. The NASDAQ as well as the small and midcap indices also reversed off their lows Tuesday but couldn’t even make it into positive territory for the day. We do like to see the hammer like patterns that formed today, which should mean a short term continuation move to the upside, but it is going to take a lot to get through the overhanging resistance.
Like we mentioned last night, the market is at the bottom end of its range and a bounce was expected but now we not only have the 200 day and 21 day moving averages to contend with but we also have the downtrend lines to get through as well. Over the past month the market has given us nothing but a series of lower lows and lower highs. Even though odds go up that we can break this downtrend because we are at the low end of the range we still should assume we will hit a wall at that downtrend line.
Here are the charts and how far the indices can move before hitting massive resistance. Once this wall is hit we will look to short the weak stocks. If we can break through this downtrend and put in a higher low then we will look to start buying again.
DOW JONES
S&P 500
MIDCAP
Russell 2000
NASDAQ
Small Cap
Looking at these charts shows us that if our bounce continues we will only get a move of 2-3% before the next wave of sellers will attempt to break this market.
The fact that our market timing indicator should give us such a small move and the way the charts on most stocks are setting up tell us to stay on the sidelines.
Thanks
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