Here are my thoughts for the start of 2011.The top red trend line 130 is what I think is the next major resistance will be at. The green line is 1st support which is at 124.66. From there if the red ascending trend line get broken threw on the down side I see 1st support at 117. There is a second ascending trend line in pink to watch which will be support but if broken could be the start of a bigger melt down. I also love to see the MACD turn here and create a divergence which is usually a great forecast for a change of direction of the market. If you go back to the bottom in 2009 the black trend lines on the MACD and on the SPY showed divergence there and the market moved up to today highs. When we get closer to this support or resistance areas I will update to where I see the market heading based on price pattern and time.
Everyone have a Happy Safe New Years and let have a profitable 2011.
Steelie
ReplyDeleteNice summary. Noticed the RSI is near 70. Isn't that usually a top caution signal?
Inlet
I am not a big follower of RSI I tend to look more to patterns. I think your right , above 70 is telling us this market is long in tooth and caution should be taken the next week or 2. Please use your stops to limit lost in these markets
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