In Search Of Resistance

By Murray Nickel

When almost every market everywhere seems to be breaking out into new all-time highs, that’s a strong bullish sign!

Technical analysts often use previous support level as resistance, or use channels to project resistance points. But with so many markets in blue sky territory at what point will clouds form on the horizon? Is the next major pull-back close at hand, or a long way off … or maybe both?

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.

* The Japan market reminds us how very long-term a slide from great heights can be (take note re NASDAQ 100). The NI225 – Nikkei 225 Index – peaked way back in 1989 at 38,957 before sliding for fourteen years to a low of 7604 in 2003. At 18,220 today it is over double the low point, but still less than halfway back to that record high set so many years ago.

Starting with the Nikkei 225, the next strong resistance band should be in the 19,500 – 21,000 range, with any push over 20,000 likely to be brief and lead to a strong pull-back.

At 23280, it would have retraced 50% of the decline from the 1989 high of 38,957 to the 2003 low of 7604, so this higher level may be a longer-term target, but NI225 should first struggle to break through 21,000.

NDX has strong resistance close at hand, near 2080. If it manages to navigate through that, the top of its trading channel sits near 2191.

So the answer to where the next level of resistance lies may be as close as +2.5% (NDX) or as far as +9.8% (NI225) – the point is that no market climbs higher in a straight line, even when in new territory, so these are two points where we should be on high alert.

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

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In Search Of Resistance

By Murray Nickel

When almost every market everywhere seems to be breaking out into new all-time highs, that’s a strong bullish sign!

Technical analysts often use previous support level as resistance, or use channels to project resistance points. But with so many markets in blue sky territory at what point will clouds form on the horizon? Is the next major pull-back close at hand, or a long way off … or maybe both?

Luckily there are two well-known key markets that remain well below their all-time highs and may contain some hints at where the next level of resistance lies that could lead to a pull-back. They are:

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

* At 18,220 the NI225 (Nikkei 225 Index, Japan) is less than half its record level set almost 18 years ago at 38,957.

Looking at NI225 first, it could easily push another 10% higher, but should face a major wall of resistance in the 19,500 – 21,000 range and this could well form the range for a long-term high.

At 23280, it would have retraced 50% of the decline from the 1989 high of 38,957 to the 2003 low of 7604, so this higher level may be a longer-term target, but NI225 should first struggle to break through 21,000.

For NDX, the next resistance band is in the 2080 – 2191 range, and if it eventually reclaims 50% of the lost territory it will ultimately push to near 2800 – about 38% above todays level.

So we can expect the next area of hesitation in the current rally to unfold as NDX approaches 2080 and/or NI225 approaches 20,000.

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

Article kindly provided by UberArticles.com

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