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Quarter-End Resistance



With the overnight futures higher, it's worth noting the potential resistance overhead. In the charts below, I've highlighted the 50 day average for both the SPX and NDComposite. More importantly, we should be aware of the Composite's downtrend line which is less than 1% above yesterday's close.

The bulls will argue that the quarter-end mark-up is in "full swing" and that nothing can stop them today. Not so fast Hoofy! I ran just a simple query stipulating that on the day before the last day of the quarter the SP futures posted a higher low, higher high, and higher close. Interestingly, there were 30 occurrences and the next day's close was lower in roughly 75% of them. Arguably, this fact refutes Hoofy's claim that momentum "just has to continue" into the last day of the quarter.

As always Minyans, past performance does not indicate future results. However, we've got some big numbers coming at week's end and with the resistance just ahead, I thought I'd point out the day's risks.

Good Luck!

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