Using a starting point of late November 2008 when the Nasdaq made a significant low, one can get a different sense of where we are at by overlaying Gann lines. On the chart (weekly nearest futures) that appears in this blog, I have overlaid the 1×1, 1×2, 1×4 and 1×8 lines. Note how these lines have variously provided support and resistance since late 2008. We now find that the 1×4 line is providing support. A breach of the 2700 level could raise eyebrows while a breach of 2600 could spell trouble. Also, it appears as though price action may be carving out a head and shoulders top, with the right shoulder currently under construction. I have further used the Square of Nine square root concepts to quickly calculate some overhead resistance levels which appear in red font. These lines of course are not pin-point precise. Do accomplish that one would have to use graph paper and a sharp pencil. But, the lines I have overlaid do illustrate the general point and that is the 1×4 line is the critical level to watch right now…..