Let’s Look At Resistance

May 11, 2001
Gary Kaltbaum

Definition of Resistance
(1): A force that tends to oppose or retard motion…

Definition
of Resistance (2):
A process in which the ego opposes the conscious recall of unpleasant
experiences.

Do I hear the Nasdaq on the second
definition? I bring this up
because everyone keeps asking me if the action of the past few weeks is the
start of a new bull market. The answer is: a big fat “I
don’t know.” Frankly,
the only thing I do care about right now is resistance. If the major indices can
just break through those numbers, then I become more emboldened. As I have said
many times before, bottoms do not happen in a day, they happen over time.

Until proven otherwise, I continue to stand behind my intermediate-term rally
call on April
11. Now let’s look at resistance.

Definable resistance continues to be at 11,000 for the Dow. This doesn’t take
rocket science. I
am certainly no rocket scientist.
I can count about
18 days since October where it had its chance to get through only to be turned
back.

The S&P 500 is now
showing resistance at around 1272.

The Nasdaq
is being turned back at 2200.

As an intermediate-term
guy, I
need several things to continue to happen:
Â

The market just has
to stabilize and stop going down

Uptrend
— give me uptrends

Most importantly
–– stocks
breaking out of sound bases. The
market has been getting its fill of breakouts in recent weeks…but unless
the major indices can get through those important resistance levels,
things are
going to get tough again.
Keep a close
watch on those numbers