The integrity of a particular resistance level at which prices breakout from is only called into question if the subsequent retest lacks the ability to 'hold' above the breakout point. Failure to do so would be a sign of trouble that requires more effort among buyers to 'absorb' the oversupply of shares at hand. However, the fact that market fluctuations can be irrational at times; there are cases when the breakout level is not necessarily the fulcrum point. Instead prices have room to 'give' but still remain above the general stopping area. This can be equally as valid so long as there comes a period of consolidation 'above' where buyers can defend the newly established higher level of support .
For this technical reason one might objectively identify as their being a potential bullish case in stocks right now. And should this analysis be applied to the basis that 'the fundamentals always find a way to fulfill the technicals,' then it gives even more reason to 'dig' into what might be the primary driver.
For starters, price action during the month of September was largely ignited by investors' response to the stimulus measures of our Federal Reserve. Not only was there a great deal of 'front running' the announcement of QE3, but as it turns out, the actual announcement was a 'sell on the news' type of event.
Since the market has not 'taken off' as it seemingly should by now, there is somewhat of a dismissive approach among investors- as if money printing this time around may not 'work'. Historical evidence would prove that monetary stimulus during the latter stages of a bull market cycle has less desirable effects, but for reasons explained in the premium newsletter- I believe there is STILL enough 'kick' in this market to accomodate a year-end/election rally prior to a major TOP.
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