Another Major Index At A Crossroads
As with many indices we’ve mentioned recently, the NYSE Composite has rallied up to a potentially significant convergence of resistance.
Continuing with the weekly theme yet again, another major index – the NYSE Composite – has seen its rally reach a potentially consequential area of resistance. It’s actually been 2 weeks now that we’ve been on this series highlighting various indices reaching a potential stalling point in their post-February rally. Of course, this is based strictly on chart-based analyses, which now appear poised to do battle with the still positive forces that we’ve noted in breadth, momentum and sentiment.
This resistance theme that we’ve focused on seems to have been validated as, for the most part, the indices which we’ve highlighted have struggled to make much headway since hitting the identified areas on their charts. This includes some broader and small-cap indices that we noted 2 weeks ago which, despite the large-cap indices continuing to make rally highs this week, have themselves been unable to make much progress. Next in line in this battle appears to be the NYSE Composite. Similar to prior indices covered this week, the NYSE is just now reaching the convergence of its
broken
post-2009 Up trendline and the post-May Down trendline.
Will these trendlines prove to be the resistance that potentially puts a pause – or end – to the post-February rally? Only time will tell. We will note that over the past 24 hours, we have begun to see some indices make an attempt at breaking out above their aforementioned lines of resistance. So bulls can argue that the scales may be tipping toward the side of positive breadth, momentum and sentiment winning out over price resistance. However, it’s too early to definitively make that call.
Furthermore, if these breakouts do occur, it will be crucial to monitor the indices to see if they can maintain their breakout levels for more than a day or two. Should they fail to hold for more than that, it will be just as damning, or more so, than had they failed at resistance in the first place.
Either way, next week promises to be another interesting one in the market.
__________
More from Dana Lyons, JLFMI and My401kPro.
The commentary included in this blog is provided for informational purposes only. It does not constitute a recommendation to invest in any specific investment product or service. Proper due diligence should be performed before investing in any investment vehicle. There is a risk of loss involved in all investments.
