Attached is the daily chart for the nasdaq as of December 28, 2009. As you can see, we've had one heck of a rally since the lows of March without as much of a measily correction. But as you can see from the chart, the Q's are approaching heavy overhead resistance. The recent rally has occured on low volume. You have a major resistance point at 46.8 dating back to August 2008 . If the Q's manage to rally past 46.8 then you probably have 48.6 as the next resistance point upwards which is the (lower) high of August 2008, just before the spectacular crash. These resistance points are further bounded by the turquoise and red ascending trend lines.
So what will the new year, and especially January bring us? Well basically any knuckle head can tell you that either the market will continue to rally, or the market will correct. Based on this chart pattern, and also based on historical precedent that during January a rather significant correction occurs in the market in the past, I would place my bets that we see a long awaited correction. The big boys seem almost ready to pounce and knock down equity, commodity prices, shake out the small little fish, gobble up cheap shares, and then ride them higher with all that free money being printed by uncle Ben.
If the Q's correct (along with everything else), look for support at 40.5. Perhaps the 200 DMA will also meet at that point later on too.
Happy new year :)
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