Home > Financial Ponzi, investing, Stock Market, technical analysis > Resistance Remains Intact for Now

Resistance Remains Intact for Now

A variety of indicators suggest that the rally may peter out around here.  Small caps (IWM as a Proxy) have rallied back to their falling trendline, and failed to break above it today.

The Emerging Markets ETF (EEM) looks like it could be forming the right shoulder of a head-and-shoulders pattern:

It’s also worth noting that the 30 year Treasury rallied back above its 2008 high today, giving reason for skepticism towards the equity rally all day.  Below is a 20 year chart.  You can see how bond prices continue to push fringe highs ever higher with each crisis:

The S&P failed to break above trendline resistance that dates back to August, forming a bearish “wick” today.  It was also a failed test of the 200 day simple moving average (red dashed line).

It all leads me to believe that equity skeptics may be rewarded next week.  Should small caps and the S&P break above their trendline resistance, it looks like there’s pretty clear sailing for another 5% or so (to 1320ish) for the S&P.

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