From Signal Watch:
NASDAQ and OEX
Yesterday, we asked, "Will the NASDAQ push through and "melt down" from here? Unlikely. Now that we are hitting two year lows, someone will start accumulating. It's like anything - nobody wants to be first. But once the herd begins moving, we will be back on track for at least a modicum of upside." Well, we definitely have light in the tunnel now. A higher low was formed in the intraday charts on the NASDAQ - not much of one, but at least we got one. And, we are sitting just under a major trendline at 2,250. This is a great sign for a rally. The OEX is just below its line at 650 as well.** So, for tomorrow, we will be watching for the break, and will go with it in the short term. Medium term, we must wait for a definitive break of the line in that time frame, at 2,300 (NASDAQ). The OEX medium term line is at the same value as the short term; 650.
In Summary:
While we did push down a little more today, crossing 650 and 2,250 on our OEX and NASDAQ indexes, we did also form higher lows on each index and are just under important lines. The key will be whether these can be broken with force tomorrow. Likely. Watch for the break and trade it intraday. If we push through prior lows, that will be a new short signal. On the Dow, we still have room to go to the bottom of the channel in the Daily Chart. On that index, I think 10,600 is the critical resistance level, and once it is crossed we will have great odds of a continuation, at least for a while.
Thanks for listening, and good luck in your trading!
Ed Downs |
