Ceilings and Floors

By Tim Knight

With all the griping and bellyaching I do, allow me to just be positive and upbeat for a moment: I think it is so cool we can live in a day and age where I can actually make a living, and provide a valuable service, on a $35 laptop while flying seven miles above the United States. This is just too spiffy. I’m merrily charting away and working on this post, all while airborne. Hurray for living in the modern age!

A few months ago, I would repeat the mantra over and over that “2820 matters”. I was just dying for us to break through that level. When it finally happened, what used to be the floor became a ceiling (see yellow tint below). On three separate occasions, prices tried to get “back on top”, the last of which was the ridiculous Trade Truce G20 nonsense. Thus, support had become resistance, and what a formidable resistance it was.

Now we’ve got a new, lower line at – – yes – – 2600. That’s a number I cite so much, I might as well make a keyboard macro for it so I needn’t type the four digits anymore. I am delighted, amazed, and pleased how swiftly our dear bullish friends have set up yet another shorting opportunity. If you’ll observe the green tint in the same chart, I believe I’ve illustrated this neatly.

Let’s look at a few other cash index markets, each of which has bounced to what I consider Probably Close Enough shorting levels, although jawboning by self-interested parties this week might goose it a little more. Who knows.

Dow Jones Composite
NASDAQ Composite
High-Yield Bonds with CCI illustrating peak reversal points

I’ll close with the Russell 2000, which itself is approaching a level of resistance around 1430 or thereabouts.

Anyway, it’ll be great to be home again. I look forward to having my nice big screens, my nice big dogs, and my tastytrade broadcast again.

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Gary

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