Here's a compilation of $NYA charts, starting with a very long-term view that move progressively into some incremental zooms. The focus of this post is on the numerous convergences of resistance lines.
(1) Weekly closing price sits smack dab on the convergence of the currently valid // channel (blue) and the obsolete // channel (pink) that jettisoned prices just days prior to the awful events of 9/11/2001. This is a helluva place for a back kiss of that channel. Tagging the blue top line has resulted in the '87 crash, the 2000 mega-bubble, and 2002's final bear plunge, all of which can be seen on this chart. Three big moves out of three suggests four out of four to me. If you're a bull, you're hoping this is an alternating phenomenon. If your a bear, you're hoping that resistance will actually work for once.
(2) Zoomed in a bit to show some interesting fib retracement symmetry at this week's close.
(3) Here's a close-up of the converging channel lines from chart #1. Notice that we're also testing the intermediate term channel (gray) top at this convergence site. And there's the 161.8% retracement of February/March '07 dump at this juncture as well.
(4) Here's the daily arithmetic (linear) chart status as of the end of this week (April 27, 2007). Hangman deadheaded into a 29 month's worth of resistance. You won't see this on the daily logarithmic chart.
(5) Then there's this broad fellow, who needs no introduction.
(6) Let's add some volatility to this mix with a "break-out" intermediate term chart:
The Fed and Team Wall Street appear to have precisely stretched out the liquidity so as to leave just enough for a blow-off allowance. The market makers can thus mop up the short sellers immediately prior to a campaign from the Fed to mop up excess liquidity throughout the summer.
Conclusion: price is trapped in an extremely narrow range of support and resistance convergences. The dollar is very close to major support, and the dollar's + divergences are soon to be glaring, if not already. Bulls have sentiment on their side, but the Fed simply has it's limits, at least it's charter says so. I see nothing suggesting that the entire ralIy since 2003 is anything other than entirely dependent upon the Fed's benevolent liquidity at the expense of the US dollar. And the game simply cannot be continued if the dollar craters from here. I believe a spell of summer aridity is in store, right after the makers are allowed to slip out the back door within the next one to two weeks (the market takes shallow dip to suck the last bears in, then a blow-off top). All will be repaired just in time for the standard-issue fall rally. We shall see.
