Key level of resistance is right where we are at 1339 and 1360-1370 above that.
What happens next is very important. If we embark on a violent reversal here off 1339, we have a very large mult-month head and shoulders in play. We can afford a little bit higher, maybe a small push to 1347 or so intra-day, but not much more than that.
We are extremely overbought on the hourlies and becoming very overbought on the daily. The weeklies are in neutral (but on a buy/rising) and the monthlies are very overbought.
I believe if we do go to new 52 week highs, whats left of this rally is does not have much time left. And i'm talking about the entire rally from March 2009. We could roll over anytime from now until September/October. But I do think we are limited to 3-4 months until the monthlies have no choice but to roll over.
Just one chart tonight, showing our nearly 5 month old potential head and shoulder pattern and why we are at such a critical level at the top of the right shoulder;
* I want to note here, even if we don't create a head and shoulders pattern and go to new 52 week highs, I believe this is all part of another long topping pattern like we had from May 2007 to October 2007. If we go to new highs, I believe it will be within 5% of the old highs.
GL
CJ
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