It can take days for the test, even weeks, but what is important is the close on Friday. If we close below today's level, then we are outside the channel.
Other indices have done the same trick recently and they could not climb back in, as evidenced by the action the last two days. There is so much significant overhead resistance -- good support that was given up -- that is so close to price, that I believe it will be very difficult for price to go very high, quickly. Most of this significant is rising -- like channel and trend lines -- so price can rise over time a bit and still be beneath the resistance. This is precisely what happened the last two days in IBM, Russell 2000, PG, and too many other to name.
Bulls also had to notice the sheer number of bear flags that were being built since last week. Those rarely point up (duh!). Just look at stuff like UTX, HON, MMM, and many other big-caps. |
