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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