Some points to watch if the naz closes under 2067. From last evening.
May 29, down 75 to 2175,
Rough day on the naz today as the WSM followed up last week's warning with a sell signal today. (those charts are updated later than this one)
From the looks of it, after hours are rough as well with the SUNW news.
If this letdown holds till the morning we may get a pretty decent gap down. These gap downs are often followed by little rallies.
IF THAT HAPPENS, I'd be very careful...I don't think a rally is likely to be sustainable here. It's my opinion that without some major news intervention the naz has more support testing to do.
The naz tested and failed the support areas I mentioned on Monday, including the bearish wedge support at 2211 that I did not think would hold.
Next stop appears to the engulfing open at 2067 from 5/16 but there is some prior support at the 50 day ema at about 2142.
My guess would be those support will give way as well in the coming days. I just don't think the indicators will have had time to reset and a correction that minor, will probably not do the trick.
If those point fails this week...then I think it's likely we get a pretty quick test of the previous 2013 engulfer with some back up support of a fibo retrace of 1997.
That will be an important area...if the naz fails there it could start to get ugly near term with a test of gap support and another fibo retrace at around 1923....followed by 1855,
The problem here of course is once momentum kicks in, it's awfully hard to stop and if the naz starts to fill gaps...the down could prove significant.
AT THE MOMENT I have no reason to suspect this is anything more than a normal correction. I will likely feel that way all the way until 1855, if we drop that far. Failure there and this could snowball. But again, at the moment I don't anticipate that.
So for now...keep an eye on the 2067 (2142 ema) and 1997 areas for support.
Chart.
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