from a market letter
The NASDAQ 100 is now at a critical 5 year,
4 year, and 3 year Resistance/Support intersection where a
peak decision
point is being reached and where a huge change will take
place.
These are ALL intersecting at
the SAME time and a Triangular Formation is now close to its apex.
*** Such apexes are very important in the
market, as long term ones like this result in a Major breakout or a Major
breakdown when they move out the formation.
So ... let's now look at the chart below for
the NASDAQ 100.
I will start with discussing the triangular
formation made up of the dark red and dark blue trend lines. The top
red
one is a 5 year resistance line, that forms a triangle with the
3 year blue support line. Note that he NASDAQ 100
has bounced
off of the blue 3 year support 3 times. The third time was
YESTERDAY.
This is no ordinary support, because if you look at the upper right corner of
the chart, you see a Resistance/Support line
that goes to the exact Peak of
the NASDAQ bubble "blow off" in 2000. Yesterday, it bounced off of
this support along
with the 3 year support ... see the double blue
arrows.
Now ... here is what will happen ...
The triangular formation comes to a "point" by the end of December.
Anytime between
now and then, the index will break through on one of
the sides ... UP or DOWN.
If to the upside, a new powerful rally
would develop. If to the downside, a large drop in the market will
occur.
If there was ever a point in the last 3 years that you
wanted to be very cautious about the possibility of being
caught in a down
draft ... this is it. "Extreme caution is warranted in the current
market conditions."
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