The DOW remains in a sideways channel and has been so for the last 19 sessions.  Volume has been unremarkable and as we approach the end of the year, one begins to think that this unprecedented rally off of the March lows is too tired to continue the trek higher.  Looking at a 10 year chart of the DOW reveals massive upside resistance from most of 1999 through late 2001 as well as 2004 and 2005.  In my opinion, a push through 11,000 would be significant and probably unlikely at this point.  I see the index going sideways to down in the near term.  We will know more if the DOW breaks out of its’ current Box.  I will be ready to take advantage either way it decides to go.

The SPX tells a very similar story as the DOW.   The current trading range has spent the last 23 days in “The Box”.  The high in the range is 1119 and the low is 1084.  I am watching closely and expect a break soon.  I tend to think that we will break down out of the range, but will be prepared to follow the trend whichever way it decides to go.    There is also long term overhead resistance from 1100 to 1200 from late 2001 to mid 2002 as well as 2004 and 2005.

The COMPQ is also at an inflection point at current levels.  The index has been in a box for the last 9 trading days and is bumping its head against significant upside resistance and will probably continue sideways to down in the short term.  If the index does break to the upside with increasing volume, that would be notable.

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