TRADING JOHN MURPHY

[TREND1]

11/2 HOURLY BARS SHOW OVERHEAD RESISTANCE LEVELS ... The "hourly" bars in Chart 5 show more resistance barriers existing above the S&P 500 more clearly. The flat red line shows the SPX backing off from initial resistance at 2753 formed a couple of weeks ago. It may now retest its underlying "price gap" formed earlier this week (green box). The more important barriers are the blue horizontal lines which mark Fibonacci retracement levels measured from the October top to its bottom. The SPX is now struggling with the 38% retracement level which is the lowest blue line. Stronger overhead resistance is normally seen at the 50% and 62% retracement levels. The SPX needs to clear the upper blue line (and the October 17 intra-day peak at 2816) to reverse more of October's chart damage. At the moment, the market's rally attempt is in danger of stalling.