NYA features some of the best-formed channels of all the indices.

It’s helpful because, when it comes to harmonics, NYA usually dances to SPX’s tune.  One recent notable exception was on May 22, when NYA completed its big Bat Pattern.

NYA reversed at the .886 of its crash from 10,387 to 4,181 (Oct 2007 to Mar 2009) — providing excellent confirmation for our call for a top for SPX at 1687.  It performed the same duty in May 2011, Mar 2012 and Sep 2012.

What should we read into the fact that it has now rebounded to the May 22 high?

continued for members…All those Fib targets that mattered back on May 22 still matter — though less so because NYA already had a significant reaction.

But, like many other indices, NYA is sitting at a double top after a rather rapid, low-volume rebound from its Jun 24 lows that featured virtually no reaction at the .786 or .886 Fib levels.  It has also run into the same yellow channel top it did when it reversed on May 22.

At the very least, we should see a decline to the bottom of the acceleration channel — currently around 9506 (about a 2% drop.)  But, a drop to the 9359 (purple .618) would help flesh out some channels and provide a better base for another leg up.

Should 9359 fail to provide support, we could see a drop as low as the .382 at 9151 (also the .618 of the 8814-9676 rise) before the bullish case suffers grave damage.

NYA is considered more level-headed than SPX and, as such, it’s potentially very significant that it still hasn’t bested the .886 of the crash of 2007-2009.  A push through the .886, on the other hand, could be quite bullish and would probably set up a double top for NYA to coincide with SPX’s 1.272 tag at 1823.

If NYA is able to push through the yellow channel line and previous top, the next resistance is between 10,115 and 10,141 — the 2.618 of 8327-7222 and the 1.618 of 8718-6414 respectively — followed by a double top at 10,387 (a 7.6% rise from current prices.)

GLTA.