Post by TradingForGod on Aug 23, 2004 9:31:51 GMT -5
The equity market continues higher all last week after staging a decent short-term reversal on Monday. Friday’s solid up day maintained the upward bias as the Nasdaq closed solidly above the 20-day MA for the first time since July 2nd. The 40-day MA at 1881 is next resistance overhead followed by the correction target at 1904 we talked about last week. The market could make a beeline straight to those numbers, but it doesn’t have too. In fact, I would be kind of surprised if it did.
The intra-day Nasdaq charts suggests that equities are getting a little overbought short-term, and could be ready for a fair sized pull-back. Initial support is at the minor uptrend line at about 1830. If this support fails, and I think it very well could, the next target is down at about 1810. This is the 38% (Fibonacci) retracement of the rally so far. It is also very near Thursday’s swing low. This support might well contain any sell-off, but the Nasdaq can fall all the way to 1787, the 62% retracement, and still be okay technically. Any weakness below there puts the point-of-view (POV) for a continued rally into better overhead resistance at grave risk.
{I don't seem to be able to post an image of the intra-day Nasdaq chart this morning, so I have included a hyperlink below that will take you to the chart.}
home.houston.rr.com/tradingforgod/082304.GIF
Remember that for now we cannot count on this rally to be anything more than a corrective bounce after the big sell-off so far this year. It COULD be much more than that, but it will take a move back over 2000 to make that the most likely scenario technically. The daily trend is solidly DOWN right now, so the market has some work to do to turn that around. A brief correction here that holds key support between 1810-1787 would be a GREAT first step.
God bless,
TFG
The intra-day Nasdaq charts suggests that equities are getting a little overbought short-term, and could be ready for a fair sized pull-back. Initial support is at the minor uptrend line at about 1830. If this support fails, and I think it very well could, the next target is down at about 1810. This is the 38% (Fibonacci) retracement of the rally so far. It is also very near Thursday’s swing low. This support might well contain any sell-off, but the Nasdaq can fall all the way to 1787, the 62% retracement, and still be okay technically. Any weakness below there puts the point-of-view (POV) for a continued rally into better overhead resistance at grave risk.
{I don't seem to be able to post an image of the intra-day Nasdaq chart this morning, so I have included a hyperlink below that will take you to the chart.}
home.houston.rr.com/tradingforgod/082304.GIF
Remember that for now we cannot count on this rally to be anything more than a corrective bounce after the big sell-off so far this year. It COULD be much more than that, but it will take a move back over 2000 to make that the most likely scenario technically. The daily trend is solidly DOWN right now, so the market has some work to do to turn that around. A brief correction here that holds key support between 1810-1787 would be a GREAT first step.
God bless,
TFG
grambo