Post by TradingForGod on Aug 27, 2004 8:10:20 GMT -5
We’ve looked at the Nasdaq on a long-term (weekly) basis and a short-term (intra-day) basis so far, so today I thought we would take a look at the Nasdaq daily chart. As before, I know that it is awfully busy, but we’ll try to highlight the main points. Remember that the Nasdaq bounced off uptrend support and the 38% (Fibonacci) retracement earlier this month and that the target proposed for the bounce is at least 1905. So far, the rally has extended to 1861.
The 40-day MA is just above here at 1867, which is also the 38% retracement if the sell-off from early July to early August (lowest red dashed line). This is a big number to get through. The Dow and the S&P, which are more bullish looking than the Nasdaq anyway, have already exceeded their equivalent resistances. I think it’s probably just a matter of time before the Nasdaq does the same thing, but I’ll be watching this level really closely over the next couple of sessions. Assuming that it does break higher, I am still focused on the 1905 level. This is important several different ways. First, as previously noted it’s the 38% retracement of this years sell-off. Second, it’s the 50% retracement of the sell off since early July. It’s also where the upper Bollinger band is currently located. Finally, it’s generally were the cluster of lows in March and May are located. All this leads me to believe that the Nasdaq should stall in this area the first time up. It would be an excellent place to take profits on longs acquired underneath here. A solid close above 1905, however, probably is good for another 80-100 point rally so watch for that to get back fully invested.
Longer-term, I am not convinced that the bottom is in yet. It could be, but the weekly chart suggests it is not. The BIG TIME important points to consider for that determination are the downtrend lines off this years choppy price action. Those numbers are 10348 for the Dow, 1135 for the S&P, and 2022 for the Nasdaq. Obviously, the Dow and S&P are much closer to an upside break-out. If these upper resistances fail it will likely set off another explosive rally similar to what we experienced last year. Wouldn’t THAT be great? Here’s hoping!
God bless us all,
TFG
The 40-day MA is just above here at 1867, which is also the 38% retracement if the sell-off from early July to early August (lowest red dashed line). This is a big number to get through. The Dow and the S&P, which are more bullish looking than the Nasdaq anyway, have already exceeded their equivalent resistances. I think it’s probably just a matter of time before the Nasdaq does the same thing, but I’ll be watching this level really closely over the next couple of sessions. Assuming that it does break higher, I am still focused on the 1905 level. This is important several different ways. First, as previously noted it’s the 38% retracement of this years sell-off. Second, it’s the 50% retracement of the sell off since early July. It’s also where the upper Bollinger band is currently located. Finally, it’s generally were the cluster of lows in March and May are located. All this leads me to believe that the Nasdaq should stall in this area the first time up. It would be an excellent place to take profits on longs acquired underneath here. A solid close above 1905, however, probably is good for another 80-100 point rally so watch for that to get back fully invested.
Longer-term, I am not convinced that the bottom is in yet. It could be, but the weekly chart suggests it is not. The BIG TIME important points to consider for that determination are the downtrend lines off this years choppy price action. Those numbers are 10348 for the Dow, 1135 for the S&P, and 2022 for the Nasdaq. Obviously, the Dow and S&P are much closer to an upside break-out. If these upper resistances fail it will likely set off another explosive rally similar to what we experienced last year. Wouldn’t THAT be great? Here’s hoping!
God bless us all,
TFG