NYSE Composite - A Lesson In Symmetry

Every once in a while the market gives a period of perfect symmetry between change of direction points.  These situations don't always occur (which makes trading interesting), but when they do, they should be played until the cycle is broken.  Below is a daily chart of the NYSE Composite Index.  Its behavior of the last couple of days has flashed warning signs that a pullback may be in order.  First, notice that it has run into solid resistance in the 6284 - 6395 range.  Today's close at 6280 was the second straight day of losses on increasing volume. 

The more intriguing aspect of this chart is the fact that since April 21, it has either made a low or a high every 18 bars.  Since the April 21 low, it made another low on May 15 - 18 bars later.  From May 15 it made a high on June 11 - 18 bars later.  from June 11 it made a subsequent low on July 8 - 18 bars later.  The next possible turning point?  Monday August 3, which is 18 bars after the July 8 low.  We will look for either a high to be made on that date, or a short term low followed by another move higher.  Whichever direction it is headed into that date, odds are that we will see some sort of reaction that should last at least a few days.





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