A reiteration of some points to watch.
My comments at WSM this weekend on the significance of 2240-55...
May 4, up 45 to 2191. The NASDAQ seems to be keying on one item only, the assurance of another significant rate cut...and is acting oblivious to anything else.
I would still not be long at the moment (except for daytrades) until the 2241-2255 resistance area is taken out.
Here are the reasons AGAIN, with a few added twists.
wallstreetmonitor.com
Potential problem areas (resistance). January low, 2251 (open at 2254), minor peak resistance 2243, 50% Fibo retrace off the 2892/1619 peak/trough at 2255, very minor 23.6% Fibo retrace off the 4259/1619 peak/trough at 2242.
Fibo calculator,
wallstreetmonitor.com
Declining downtrend line from the September high, should be about 2200 on Monday (just eyeing it). Rising wedge resistance in a downtrend on the daily, again just eyeing it appears to be 2230. Extremely minor 'gap down' (but filled) resistance at 2205. VIX still above the 200 day ma, with a recent tendency to bounce off that point.
VIX chart
wallstreetmonitor.com
Examples of a rising wedge in a downtrend, scroll toward the bottom
chartpatterns.com
In addition the naz has the 'almost' evening star candle (3 day pattern) that indicates some short term topping at 2220-32.
And lastly an interesting note on the hi/lo differential which has been extremely strong as of late (bullish mid term, lagging)
I usually don't plot the CCI of the hi/lo because of the volatile nature of the CCI. However in looking for parallels to the recent FAILED rallies on the NASDAQ, I noticed an interesting parallel depicted in the chart on the hi/lo differential this weekend. I'll explain it here and there (temporarily). Please go (copy/paste) to this link to see the chart. It's much easier to see what I'm trying to show.
wallstreetmonitor.com
On the 3 previous rallies, the first day that the downturn of the CCI was plottable (after crossing over 100)...the rallies ALL SAW THEIR NEAR TERM HIGHS.
The NASDAQ got a downturn (CCI of thr hi/lo) on Thursday, suggesting that the high might have been put in on Thursday.
BUT PLEASE REMEMBER...the above scenario would ONLY be the case IF THIS IS ANOTHER FAILED RALLY and even then this is only anecdotal evidence from a very small time period. I would not put much emphasis on this particular indicator.
WHO KNOWS? This rally could be the real thing (this upward momentum has been fierce), perhaps the bear is dead but prudence suggests caution and I would think that position traders (not day traders) might want to wait and see how the naz handles the resistance at 2240-55.
My own opinion is that the weight of near term resistance very slightly outweighs the current momentum and some deterioration is likely here but it's really too close to call with confidence at this point.
If the naz surges right over 2255, then I would look for weak resistance in the coming days at a filled gap down, minor peak, at 2308-2318 but I would be focused on the 2405-2448 region. Those are fibo retrace areas from the 2892/1619 and 5132/1619 peak/troughs with the 61.8% and 23.6% respectively.
As for support, I've gone over those areas ad nauseum in the prior commentaries so please read those. Note the naz bounced off the areas mentioned as Friday's parameters. The fibo retrace at 2087, backed up by gap support at 2075 with the gap, unfilled as of yet at 2082. This area of support picks up minor reinforcement frpm Friday's bullish engilfing line open. The 'added' support is weak because the candle pattern is 'out of place' here. |
