Looking at the 60-minute and daily NDX, I think we need at least a half-day rally on the NDX to get it up again to allow the rest of the drop to take place if we are going lower.
We are below the middle BB on the daily, but right at the middle. That leaves us some room to fake up and over it before resuming a trek down to touch the lower BB around NDX 1500-1522.
The upside is pretty tough. The areas around 1620, 1630, 1640, and 1650 all have some sort of resistance in the form of moving averages, Fib re-traces, or trendline support/resistance. That really limits the upside in a trending, listless market. OBL is the only one that could get us up over those hurdles temporarily.
I think if the NDX got a bit disconnected from the COMPX, it could drop to support at 1582 and bounce to 1620 or 1630. That would help get the 60-minute back up and set up a bit of distribution before a drop back down for expiration and a plunge to the lower BB (and gap) on the daily at 1500-1522 NDX.
On the way up, I believe the NDX was at 1582 when the COMPX was at 1934. Today the COMPX hit its support, but the NDX was about 8-points away from that line at 1582.
Either way, I'm looking for another bounce attempt to reach 1965-1980 COMPX and possibly 1630-1640 NDX. If we get close to either of those and the 60-minute turns, I'm getting Jan puts and shorting until the lower BB is hit.
Max, you're almost sounding as if you're ready to take a "short" dip in the market now <G>.
By the way, it has been a long time since we crossed over on the BB's on the NDX daily. I think it has a been nearly 6-months. |
