Yesterday`s low on the NDX (~1060) served as a support today. In general, in a rampant bull market like we have had since the beginning of the year, "S" becomes more important than "R".
Sometimes it is the 10, 20, 40, 50, 100 or 200 EMA (you name the chart time frame - it varies but there are common ones), sometimes prior pivot points, polarity reversal, sometimes whole numbers, etc. etc. - it is important to watch them all and look for successful test and/or penetration of each one... stuff like TICK, TRIN, volume, etc. can help to confirm enough momentum to break or not to break the levels. This may seem obvious but it is the successful combination of this that makes my winning days. Paul
Another consideration when trying to evaluate support and resistance is whether or not that support and resistance was achieved on high or low volume...In December, in the S&P alot of S/R would be penetrated on the way up and then again back on the way down...If there is no one around to defend price, then the short term momentum just seems to run it right through and everyone jumps on the short term momentum wagon... As far as overhead resistance goes in this market, I just dont believe the sell side will defend aggressively anymore...Its like they see the train coming and jump off the tracks...
great stuff... would also add that IMO traders have been pondering whether we were/are going to see (another) inverted H &S on NDX which would imply a measuring objective near prior lows. Although it was my opinion that "symmetry" of said "potential" HS was questionable... it was an issue. And perhaps bulls tried/are trying to defeat said pattern by a thrust above levels that would defeat formation of a classic right shoulder. Jury still out. And expiration week clouds this since pegging influences will creep into certain key components.
agree with your points... sell side won't defend until time is right! Train analogy very fitting, but come seasonally bearish period it will be the train that "will jump the tracks".