Monday, July 6, 2009

Resistance Line Still Holding

If you look at my post below, back in the early part of June, I said that we were probably heading lower. There was a downtrend line that price action did not want to get above...Now that we've gotten a few weeks of trading under our belt since then, the price still does not want to break above resistance (the red-line). And it actually has tested that line twice, which makes it more significant.

Below is a DAILY chart of the same 'underlying' (ticker 'SPY' (which again, is basically 1/10 of the S&P 500 index)).

My target for the move lower is to the 80'ish level or 800'ish level on the S&P 500; give or take a few points. I base that move on the embedded head & shoulders pattern that started to form since the beginning of May.