Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : News Links and Chart Links -- Ignore unavailable to you. Want to Upgrade?

To: Les H who wrote (4700)	1/10/2003 9:57:23 AM
From: Softechie	Respond to of 29600

Technical Levels : So when we reviewed the Nasdaq yesterday, a good portion of the assessment centered around its 200-day simple moving average. Now on the prior leg higher, the index tested its 200-day on two consecutive sessions. Yet on both occasions, it failed to hold that level on a closing basis. The most recent failure occurred on December 2nd, which contributed to the rationale for our bearish bias shift back on December 3rd. Yet if you're looking for the last time the index actually closed above its 200-day simple moving average, you'll need to take a somewhat broader view. As we stated on Wednesday, January 8th, this rare market configuration last occurred on March 11th, 2002 -- roughly nine months ago -- and was sustained for all of two consecutive sessions. Put another way, it served as a convincing head fake for many traders. At any rate, with yesterday's close at 1438, the index just edged out that 200-day moving average by a margin of roughly two points. So while the recent price action has matched up well with our bullish bias shift originating on January 3rd, it also raises obvious questions regarding the forward outlook from current levels. So a few random points are in order here. Note that in three of the prior six sessions the Nasdaq has extended itself for a significant intraday move and then proceeded to either take out or challenge a major resistance point. On January 2nd, the index extended for a 49-point intraday gain, and finished the session by edging above its 50-day simple moving average. On January 6th, the index extended for a 41-point intraday gain, and finished the session by challenging that straight-line resistance in the range of 1419 to 1423 -- it closed at 1421. Then yesterday, the Nasdaq once again extended for a 44-point intraday gain and actually managed to take out its 200-day despite its significant near-term overextension. So the three preceding observations can be more succintly characterized as 'bullish price action'. Despite this morning's adverse response to the employment data, we would continue to lean long on a near to intermediate time frame. We've addressed the favorable volume as the markets move higher -- that is the stronger volume on up days relative to down days. Also note that the markets appear to be absorbing adverse news for the most part -- climbing a wall of worry. Those continue to be the earmarks of a 'legitimate' rally, and with the way the charts are shaping up we continue to favor a near-term bias to the upside. As we stated yesterday, the consolidation preceding this break of its 200-day simple moving average may take more time, yet the magnitude of any pullback isn't likely to take the index much further than that 1390 to 1400 area as things currently look. -- Mike Ashbaugh, Briefing.com