Nasdaq 100

[Melf Elf]

Some of the indices, like the Russell that J.B. mentioned, have broken out to new highs.  The QQQQ has lagged a bit, but is poised for a move higher if it can take out the top of the range we've been in over the first half of 2005 (dark black horizontal line on the chart).  Looks like an Inverse Head and Shoulders pattern.

Note that there are several targets in the $42s-$43s, if the QQQQ can break out.  (Sorry about all of the junk on the chart  ).

[Melf Elf]

ICHIMOKU KINKO HYO CHART:

[Melf Elf]

The QQQQs got the Inverse H&S breakout the day after my last post in July (see above).  Nothing real exciting since, but it still looks okay, with targets in the mid-42.00s to mid-43.00s still IN PLAY.

Both selloffs back below the neckline in late August and in late September found support at the bottom of the Ichimoku Kinko Hyo Kumo (Cloud) which you'll see on the next chart, so while it was sloppy, it looks okay as well.

[Melf Elf]

Uptrend still in tact.

[calven]

QQQQ looks terrible on a technical basis. Here are some charts I made in my forum/blog. Looking like we may test 2 year trendline support very soon. 

QQQQ October 6 2005
QQQQ testing upsloping trendline support. A breakdown of the trendline means a test of $38.20


QQQQ - October 7 2005
The QQQQ hit trendline resistance and was driven down hard during the first week of October. Significant support at $38.00 now supports the QQQQ. A breakdown at these levels signals longer term weakness for the major markets.


QQQQ looking terrible on a technical basis. $38.00 support cut through with ease. Next major support near $36.00. Look for a small bounce at $37.05...


QQQQ - October 17 2005
QQQQ broke major trendlines in the past 2 weeks trading. Very bearish signal heading into the winter months. Could be looking at a correction all the way back to the 2 year upsloping support line of 36.75. Anyone else care to share their analysis or insight?

[calven]

Approaching breakout levels...

[Melf Elf]

Note that there are several targets in the $42s-$43s, if the QQQQ can break out.  (Sorry about all of the junk on the chart  ).

The 6-month Inverse H&S pattern broke out on July 14, 2005, the day after that post, putting a Target of 42.78 IN PLAY (scroll back to original post).  Since the pattern formed over 6-months, the time projection for when we would expect the target to come in would be six months hence, roughly January 14, 2006.

42.78 MADE on January 9, 2006.  

The May 13, 2005 Bullish Falling Wedge Breakout put a target of 43.43 IN PLAY.  That pattern formed over five months, so the time projection was by (roughly) October, 15, 2005.  Sometimes, you get a Fibonacci extention of time, like 1.618 longer than it took for the pattern to form.    At any rate, we missed that target by twelve cents: the January 11, 2006 high only was 43.31, so that could be it.

There's also a "lost target"  of 43.68 still IN PLAY from the November, 2004 breakout (not shown on this chart).  I thought we'd get there on the January rally, but we fell short of that one, too.  We'll see if that gets MADE later on.



 

[domination]

i wonder if the nasdaq can go higher this year, or if it will go lower
such a tight range it's been in for the last couple months

[Miguel007]

Big Volume in this LT breakdown.

[Melf Elf]

The QQQQ hung onto key 40.16-40.19 support by a hair, closing at 40.19.  The low on the day was 39.96.  Given that the underlying NASDAQ 100 closed just about on its low, it makes you wonder if the QQQQ close right on support wasn't manufactured.

 

At any rate, the QQQQ is "on the ropes" here, and needs to rally.  It already has shown signs of trouble which we'll look at below, and it wouldn't look good to take out 2006 support (40.16 - 40.19) on a closing basis.  Target: 37.33 would be IN PLAY.

Signs of Trouble:

1. After the November - December, 2005 "Mini" H&S Top target of 40.30 MADE during the first session of 2006, the QQQQ went on a short-squeezing seven session Parabolic screamer to the upside, to 43.31 on January 11, 2006.  That's the high for year, so far.

Anecdotally, David Randolph's "gut feeling" about a high in the QQQQs at the start of the year was uncannily accurate...only several days early.  He gets an applause for that when he returns.



2. Parabolic rallies often have "Parabolic Returns"  to the origin of the rally. The Parabolic Rally began at 40.16 on January 3, 2006.  The Parabolic Return to 40.19 occurred on March 10,2006.

"Thud."  At 40.19 on March 10, 2006, we were right back where we started the year.  "Let's try this again, only let's be more reasonable this time!"

 

3. The rally off the March 10, 2006 low looked much better, in that a pattern was built (the Ascending Triangle, in purple).  Rallies tend to be more solid and more sustainable when they come off a base/pattern of some kind.

4. The Ascending Triangle breakout above 42.01 in late March, 2006 put Target: 43.83 IN PLAY.

Math:

High of the pattern: 42.01
Low of the pattern: 40.19

42.01 - 40.19 = 1.82 points, added to the breakout above 42.01 = 43.83 IN PLAY.

5. The breakout was "sloppy" though, to say the least.  By "sloppy," I mean that the top of the Ascending Triangle at 42.01 got violated going into both the April 17 and the May 3 lows.  Very "sloppy."

6. Whle the "sloppy" action was going on, the QQQQ formed another bullish pattern, a Bullish Falling Wedge (the pattern in red), so things still looked okay.  The "sloppiness" was justifiable: the QQQQ was forming another bullish pattern: a Bullish Falling Wedge (pattern in red).

Since the trend in the QQQQ was bullish, that pattern "should have been" a bullish continuation pattern, and it "should have' broken out to the upside.  It didn't.  It broke to the DOWNSIDE on Thursday, May 11, putting target: 39.455 IN PLAY.

Uh-oh-h-h....that's a whole different ball game right there!

7. Also on Thursday, May 11, the QQQQ broke a one-year up trendline (black line).

8. The Ascending Triangle (pattern in purple) target of 43.83 went ON HOLD each time that that the QQQQ went below the 42.01 breakout.  That target gets CANCELLED when the QQQQ trades below 40.19, which is the low of the pattern. 

We closed  on Friday at 40.19. (We need that face on the toolbar, biting fingernails).

9. Friday, May 12 was the first close below the 200DMA since October 12, 2005. 

That October 12 close was a one-day Bullish Wolfe Wave #5 fakeout, which resolved to the upside, beginning the very next day.  The QQQQs went on an upside screamer to the Bullish Wolfe Wave Target #6 (applauded calven for pointing that out to us).

10. Technically, when the QQQQ failed to hold above the 42.01 (the Ascending Triangle breakout), the MACD failed from below its signal line, and took a nosedive below the zero line.
(I'll post that chart next).

We've got a lot of bearish evidence here.  The QQQQ needs to rally off this 40.16 - 40.19 support.

[Melf Elf]

QQQQ - MACD

[Ramsburg]

Melf,

Great Analysis (applaud 2X)... I couldn't add anything else to it (I have the exact same view right now).

Unfortunately I was unable to post some technical comments on the NDX recently, but this is ugly right now... like you said, we need an urgent up move, or else ..... ups... I rather don't say these words....

Regards !

[Terliso]

Just by looking on the QQQQ weekly scale ... there is no doubt the chart is really bearish, looks like we are entering in BEAR MARKET (Shorting Time)

---- The 50(SMA) weekly Scale just missed by hair
---- Histogram did not managed to tick up on the positive side
---- MACD Fast Line bounced below from Slow line... (VERY UGLY!!)

As always I must applaud Melf Elf for his great Analysis

[Melf Elf]

Frederick and Alister,

Thanks for the feedback, and for the charts, Alister.

The QQQQ hung onto key 40.16-40.19 support by a hair, closing at 40.19...it makes you wonder if the QQQQ close right on support wasn't manufactured.

Yesterday's close was the 40.16, which also looks curiously manufactured.  The market looked much rougher than QQQQ being down only three cents.



40.16-40.19 is holding up on a closing basis, though, so I'll give it the benefit of the doubt.  That looks like they might want to rally it a bit, but I'm still cautious here.  Got out of all of my trading longs yesterday, except one. 

[nullzero]

I dont think QQQQ is going to have a bounce. Its looking super bearish right now.