Briefing: NAZ: The obvious targets are at 2057/2052 (typical minimum retracement of 38% and Mid-May low), followed shortly thereafter at 2029 (50 day simple ma) and the late April low at 2000.
Chart Watch : Another day on the defensive for the tech dominated Nasdaq Composite. Although this index has felt the brunt of the selling pressure in the wake of the month long speculative surge, the last week has not been particular kind to the broader and bluer S&P 500 and Dow Industrials which had been running hard for most of the last two months. A week ago we highlighted several technical concerns that suggested the advance was long in tooth. Now we have each of these major indices breaking down back below technical barriers leaving the door open for further weakness over the near term. In the Nasdaq we saw the April/May trading range top breached (2232) with the indicators rotating to the downside. At this point the index merely appears to be staging a correction of the 700 point/43% surge. The obvious targets are at 2057/2052 (typical minimum retracement of 38% and Mid-May low), followed shortly thereafter at 2029 (50 day simple ma) and the late April low at 2000. Although these levels are relatively near at hand, with the index likely to stage at least some type of bounce near here, the size and time length of the preceding rally raises the probability that the entire correction will not be completed during a one week pullback. The Dow Industrials has slipped back below the trendline off the Jan/Sep 2000 highs following its impulsive advance with the index vacillating near the mid-point of its May range (10,834). A congestion zone between 10,800 and 10, 775 follows with its 200 day simple ma at 10,643 and 38% retracement/50 day simple ma at 10,493/10,462. The S&P 500 broke its May range top, the trendline off the Sep 2000/Jan 2001 highs and a long term trendline off 1994/1998 lows and is now eyeing congestion near 1240. Its 38% retracement is at 1226 and the 50 day simple ma is at 1216. -- Send comments or suggestions to Jim Schroeder, Briefing.com |
