When we last shared thoughts, the market was looking over the abyss and considering the downside plunge. Back then there was a reasonably high probability that we would move higher, not lower, despite the fact that it is likelya market dying a death by a thousand cuts. So now, after the big bounce, the market finds itself facing big resistance. So what exactly is this big resistance? Here's one view of it when considered as ranges And here's another based on the neoclassical concept of bearish retest-and-regeneration zones and breakdown areas. The point is that there should be significant numbers of willing sellers just overhead, and after a impressive march higher, this big bounce could be nothing more than a bounce in an unfolding larger-picture top. If we, in fact, to begin to pull back — and the odds highly favor that scenario now — the classical TA folks will likely being drawing pictures like this: It will be at that point that talk shifts from bullishness to bearishness and talk of a potential neckline break and major head-and-shoulders top will get top billing. The neoclassical read at this juncture is clear, though. The probability that we get, at a minimum, a decent spate of selling is extremely high — in the 90%-plus range. That doesn't mean that we necessarily have a major top in place, but it would confirm that rather than running back to new highs, we instead are dealing with a razor-blade market — one that will cut you up if not careful. The exact area of anchored resistance that doubles as a bearish retest-and-regeneration lower attempt runs from 2045.50 to 2061 and possibly as high as 2078. Thus, the meat of resistance lies just overhead, and it will coincide with a second bearish retest and regeneration on the Nasdaq and NDX 100 as well. So, this is what was envisioned a couple weeks ago and now has indeed played out the way it was expected. Will the next leg be lower as expected? Time will tell. All year long the neoclassical reads have proved reasonably accurate, starting with the range-trading call way back in March, with the direct call to get out less than a week before the market plunged, and with this latest read calling for a large bounce in the context of a lot more up and down to come. Whether this is a major top or not will depend a great deal on the central bank’s attempt to apply more stimulus measures and if that can translate into increasing corporate earnings and recession avoidance. In the end, if Wall Street can't produce higher earnings numbers, then either P/Es get stretched farther or prices have to come down to keep reasonable ratios. We are late in the cycle to stretch P/E's much more. More from MarketWatch