You know the importance we put on the Institutional Index which is made up of the "core holdings" held by Institutional Investors. Given that they are responsible for over 50% of the market's daily volume, that makes the index's movement critically important to analyze for where the market is at any given moment of time.
So, below is the current Institutional Index chart that we post on our paid sites every day.
You can clearly see how the Index formed a Head & Shoulders pattern in 2007 which was the beginning of the market's down fall.
In 2009, the market bottomed and moved up until its recent peak in April of this year. That peak became the point for defining the current resistance line in the market. (It is shown as a red dotted line on the chart below.)
* That resistance level is arguably the most important long term event to watch now. If the Institutional Index fails to rise above that resistance when it is tested, then the market could face a nasty downside surprise.
While looking at this chart, also note the blue dotted resistance line we drew.
That's were we are now ... the Institutional Index is facing that resistance test as we speak. For the index to gain permission to rise up and test the 2007-2010 Major Resistance line, it will first need to get past the current April to September resistance line.