<font color=green>Keep your eyes on Magic 2000
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According to John J. Murphy, in his book, "Technical Analysis of the Financial Markets" he describes a chart pattern called a rounding bottom. He's says they are very slow and gradual but usually mark major turns. (see chart)
This market is still in SMASH 'N GRAB mode
All eyeballs of the world will be focused on Wednesday morning. I would expect a gap up because those that were not aware, or could for some reason not participate in the afternoon rally, would want to jump in and the market will then strengthen with this new infusion of buying energy. We would do well if we push ourselves through the 2,300 resistance area.
It is possible that NASDAQ will still move down and that Tuesday was just a pause to refresh itself. The earnings are still weak, nothing changed but with the stock prices so low I would imagine it would already factor in the much lower earnings, but maybe there are still many nasdaq stocks that still overpriced. At this point, no one knows.
But if we can just hang in there above 2,000 for a few more session maybe the sellers will finally be flushed out completely. Now at this point the conservative money sitting on the sidelines may decide to participate. More demand will push the market up, that's pretty simple formula, but true.
And you probably know what comes yes, right if we sell off again, and move back below 2,000 we can have one heck of a relapse which could build on itself and again, causing disillusionment, and a real fear that this marke will be going even lower at the next break down. If we break 1,900 we are back to retest 1,800 and so on. I would once again be trading the 15 and/or 5 minute chart. Keep the compx chart up in an area of your desktop. So you can watch the support and resistance lines. You should put up a 15 minute COMPX chart draw lines at 2,200, 2,160 and 2,050, these are areas where the support broke down. So all eyes on 2,000. |
