Yup, seems everyone is all excited about Friday's news from Euroland. Yet looking at the charts one has to wonder "why"? Yes, Euroland agreed on something. But without Britian? Really? REALLY? The biggest wonder of it all was that Euroland leaders/politicians agreed on something. Well, everyone but BRITAIN!
And what do the charts proclaim? Much Ado About Nothing! Thursday, the overhead resistance proved too much for the averages and they pulled back. Friday, with all the magnificent news from Euroland AND hearing Consumer Confidence was once again higher.........we bounced back to the resistance line. Yee haw and Whoopee doodles!!
NOTHING has really changed. We are still bouncing along, hitting resistance and finding that it is simply too strong to penetrate. The good news is that the averages continue to hit resistance again and again and again. When a wall is hit over and over and over, it crumbles sooner or later. Well, at least most of the time!! But, when it does crumble, the forces usually pile through.
Think of the Medevil army that finally punches thru the castle gate. After numerous attempts, the castle gate finally gives way. And damned if those soldiers don't pile thru, overwhelming the castle guard. At least that's how it goes in the movies!! LOL
So...... if and when this resistance level is penetrated, there is a good chance it will be a strong punch upwards, potentially lasting for more than just a day or two. Perhaps setting the stage for a new rally. So keep your powder dry, be patient, and pounce when it happens. Naturally, beware of false breakouts. Remember too, that sometimes the Knights fail to break down the castle gate and turn tail, running home to safety. It happens!
Momentum - Stalled
Trend - Sideways
The CHARTS - daily DIA and SPY
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