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In Search Of Resistance

By: Murray Nickel Emerging markets around the world have pushed to higher and higher record levels. They're now being joined by their more mature cousins - such as DJI, S&P 500, and DAX.

But with so many markets in uncharted territory, it makes it hard for the technical analyst to know just how far a rally might run. Where will the next level of resistance be that results in a significant pull-back?

But not all major market indexes are at new highs. There's two major markets that are still way below their all-time highs, and could help us see where the next bands of resistance lie. One is from USA the other from Japan:

* NASDAQ 100 (NDX) is sitting near 2030 - well below its all-time high near 4800.

* NI225 - Nikkei 225 Index, Japan - is sitting at 18,220, less than half of its all-time high set way back in 1989 at 38,957.

Beginning with NI225, a quick chart analysis shows the next top is very likely to form in the 19,500 - 21,000 band. It could eventually push higher, but not before a serious pull-back completes.

That slide from a high of 38,957 to a low of 7604 will be 50% retraced at 23280. So after a serious pull-back from the 19,500 - 21,000 range, a further push to over 23,000 is possible - just don't expect to get there in a straight line!

Meanwhile, NDX will have retraced 50% of its decline at 2800, about 38% above todays 2030 level. It also has strong resistance much nearer at hand - at the 2080 level. If it pushes passed this level then the next resistance point is near the top of the trading channel at 2191.

So be prepared for the rally to falter as NI225 approaches 20,000 and/or NDX gains another 50 points to near 2080.

Article Source: http://www.lifeweightloss.com

Murray Nickel is a mathematician, statistician, and professional trend trader. He offers a free trial of trading signals for market indices and index ETFs, spot Forex, and spot Gold. He also mentors traders aiming to succeed at trading global markets.
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