The New York Composite Index lies within a hair of a trendline that has acted as either support or resistance numerous times since 2017. In this case it is potential resistance and a compelling one at that, just 12 (or so) points from the high achieved Tuesday afternoon. Peter Eliades was the first to call our attention to the trendline, and it has filled us with anticipation since. Drawing a trendline that works predictively is as much art as science, and if it attracts too much attention, that can tend to reduce its effectiveness. There’s no reason why NYA cannot blow past the trendline, but were that to occur we would have to infer that there’s a motherlode of unspent buying power yet to be tapped. There is additional resistance in the form of early 2018’s record high at 13,635. If it too gets shredded by a short-covering stampede, that would put a 15,414 target in play and 14,242 as a minimum objective. One more trading note: If NYA plummets from these levels to 11,896, as scary as that would seem, that’s where we would suggest loading up the truck.
A Key Index Faces ‘Moment of Truth’
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