Just looking at the market action into the close, one thing jumped out across the charts. Lots of indexes or reference charts were stuck at round number resistance today. What I mean is near price levels ending in zero zero. '00'.
Here is the $TSX.
We can see that the mid month high for the $TSX was 14000. Here we sit a month later and now it seems like the 13900 level is resistance after testing higher both yesterday and today. I have been impressed with the $TSX resiliency on the January pullback. The $TSX found support at the 50 DMA. Recently the $TSX has outperformed the $SPX. The 7 day run of gains into today was apparently the longest run in three years for the $TSX according to BNN. It will be very important for the $TSX to make new highs here and keep the string of higher highs and lows intact. 13901 was the final high before the $TSX started making lower lows under the neckline in 2011.
Let's look back to see the importance of 13900 on the $TSX. This level looks real important to me.
Here is the $COMPQ. This is an extremely important level for the $COMPQ. This level was the retest of the high back in the year 2000 before the market rolled over into the 2002 bottom. After surging almost straight up to 4200 in recent days, the $COMPQ tried higher today and created a doji candle. The test of the highs is critical here if we are going to continue the road higher. After a big pullback below the 50 DMA, we need to see this leading exchange continue to power the markets higher in a leadership position.
How about the $RUT? Actually it did not close near round number resistance but the Russell 3000 did.
Here is the $OEX. The $SPX did not close near a round number today, but the $OEX did. That is the index for S&P 100 stocks. It gets more intriguing from here.
$GOLD challenged $1300 today. It made it up to $1296.40 which is just shy of the $1300 level. Look at the size of the bullish candles when they shot above $1300 since falling below in June. All five are huge. We'll see if this becomes another successful breakout above major resistance with a big bullish candle moving above.
Even the Dow got stuck at round number resistance today.
How about taking the broadest index, the Wilshire 5000. Yes, it got stuck at 19500.
Here are the transports. $TRAN .
Here is $WTIC.
Crude has a long selling wick on the candle for today, February 12. The 2013 year end found resistance around the $100 level. Today crude tested higher, however no buyers showed up for work and crude closed below the open and slightly above the lows for today. This $100 level has some friction.
As a bit of trivia, $100.62 was the final high before $WTIC unloaded into the August 8 low in 2011. So there can be something to round number trivia. Just for a deeper dive, check out how important $100 is to the price of crude. To top it off, look at where the 40 WMA is in crude oil. $99.84. Close enough to $100 for analyst work!
I did find it odd how many charts coagulated near the round numbers.
The market is full of extremes here. Some analysts see 1929 analogies (and some pretty reknown analysts are behind those views) whereas some of the other technical systems like IBD just got confirmed buy signals. I don't have a clue if it is the fact that we are 2 days from Valentines Day which falls on 2/14/2014? I don't know if it is the coming full moon (note the two '00's in moon!) effect on Valentine's Day 14/2 at 7 minutes before 00:00? It all does seem very odd.
What does it all mean? I don't know. Can we trade off it? I don't think so. But if everything started to fail here at round number resistance, maybe we could trade off that? It seemed important to show how many things are set up at round number resistance today, and how important round number resistance can be. These current levels have caused dramatic moves in the $TSX, $WTIC, and $GOLD as shown above so if you trade the Canadian market, stay nimble.
Just for good measure, Platinum (1406), $SSEC(2100), $NIKK (14800 close) were also impacted by round number resistance today. The $DAX(stopped at 9600), $FTSE ( stopped at 6700) and $CAC (open at 4296, closed at 4305) travelled up to or near round number resistance as well today. I would say $AORD and $SILVER were not impacted by the resistance at a round number phenomenon but they were still in a close range to one. The other two not aligning were the $SPX and the $RUT.
Makes ME wonder why all this numerology is hitting in the 2nd month on the 7th week of 2014. Maybe I'll just trade the price action but be ready for anything. Close the book on a numerological day.
Good trading,
Greg Schnell, CMT
