Here's a chart that I call the SOS Index. It consists of "Six Outstanding Stocks": BHP, CSL, QBE, WBC, WOW, WPL. It is a small group of the bluest of blue chip stocks across a range of sectors (Materials, Energy, Banking, Insurance, Consumer Staples, Biotechnology). They have all shown good growth over the past 10 years.

If these stocks can't do well, the market is in trouble.

The above chart is a much cleaner picture of the state of the current market, which is a bit "messy".

This chart shows a distinct step down from the highs of September/October to November/December. The chart is currently testing the lower support level.

Even if the chart breaks higher, it is still only within the consolidation of September/October and must rise above that resistance to prove a new uptrend.

This is a simple device that takes a lot of the "noise" out of the market.

A break lower - and the market will probably head a lot lower.

A break higher - and the market is still facing considerable headwinds.

The market usually takes the line of least resistance.

We shall see. The seasonal factors favour an upsurge - but to do so, the market must overcome considerable overhead resistance.