NASDAQ 1600 - Double Resistance

When we last looked at the 89/144 RSIs at the first red arrow at the beginning of the year, we knew that they were at Bearish Synchronicity. On January 6, we got the Bearish Wolfe Wave 5 Fakeout Breakout, ultimately a TRIPLE refusal in these RSI's, and down we went. 1478 "last support" was violated, but it held on a CLOSING basis on January 14, and look where we ended up yesterday!




The NASDAQ closed just eleven cents below the bottom of the smaller Ascending Triangle (in purple). Look at the similarity between the last two candles on the chart, and the two candles of the November 20-21 Bear Trap. Yesterday's candle wasn't quite as good as the November 21 candle, but it's a Bullish Hammer and if the NASDAQ can rally back inside the Ascending Triangle, it sets up another Bear Trap, and a chance for a rally back to key NASDAQ 1600 area, which is where the big Ascending Triangle (in green) broke out.



If we should get to the 1600 area between now and the time that we become Obamanation, it not only is the top of the big Ascending Triangle in the last chart, it also where the bottom of the broken Bearish Rising Wedge comes in for the next couple of trading sessions, so it's DOUBLE RESISTANCE. The Bulls have to get through that level AGAIN. The Bears very much want to defend that level this time, and not allow The Barbarian through the gate.



The 55/89 RSIs came back to Bullish Synchronicity and bounced higher yesterday, so that's good to go for a rally.




If we rally to 1600, the MACD will move higher, back toward its declining signal line. That kind of move is a "Feet, don't fail me now!" because if the MACD fails at/near the signal line, that's a Kiss of Death signal that sometimes results in a sizeable move to the downside, like the one we got off the September Kiss of Death signal.