Nasdaq 100

[beroznikmal]

Bull made a major move today above the ~37.21 and now is in the wedge...
The volume was also heavy...
It is very difficult to figure out where we go from here....
I think we are still in a bearish market .. looking for confirmation these coming days...

B...
p.s.
Melf you should trya word recognition program if it urts to type...
Get well soon...

[Melf Elf]

Bull made a major move today above the ~37.21 and now is in the wedge...
The volume was also heavy...

beroz,

they sure did.  the bulls opened it back inside the wedge, closed it above the 50 dma for the first time since may 10, when the market cracked, and also took out the 37.63 August 4 high on a closing basis, which was the head of a possible h&s top morph. nice day for the bulls. downside targets are ON HOLD.

It is very difficult to figure out where we go from here....
I think we are still in a bearish market .. looking for confirmation these coming days...

bulls have some more head room here.  the bottom of the last flag and the top of the current wedge are at about 38.07 and 38.21.  didn't calculate it exactly.

yesterday also was the first close above the NDX 1515-1511 neckline that we've discussed so often, so that squeezed some bears out of their shorts and could produce more rally on additional short covering and new buying.   in addition to the extremely high bearish sentiment that we've had for several weeks, mutual fund cash levels are very high, so that also could help to fuel a rally.

Melf you should trya word recognition program if it urts to type...
Get well soon...

thx, beroz.  i'm taking it easy. 

[stockontop]

Good move for the bull. gapped up 2 days in a row.

[rickjust]

hi,
which way now for the qqqq's .
i see a cup and handle formed but we are below both 200ema and 200ma.
so consieveably i see a rally to the 200ema at 3908 which will give us the second shoulder, and then a series of lower tops lower bottoms with support at around 3790.
macd rolling over, rsi still has legs but may double top at 70.
which is stronger cup and handle,double top, or head and shoulders?
so looks like a battle between the old combatants the bulls and bears.
i am playing for the bears being always a little skeptical, lol
maxi

[rickjust]

hi,
which way now for the qqqq's .
i see a cup and handle formed but we are below both 200ema and 200ma.
so concieveably i see a rally to the 200ema at 3908 which will give us the second shoulder, and then a series of lower tops lower bottoms with support at around 3790.
macd rolling over, rsi still has legs but may double top at 70.
which is stronger cup and handle,double top, or head and shoulders?
so looks like a battle between the old combatants the bulls and bears.
i am playing for the bears being always a little skeptical, lol
maxi

[Melf Elf]

i am playing for the bears being always a little skeptical, lol
maxi

maxi,

I'm still uncommitted.  Neither team has made me a good offer.   

After the early August Bearish Rising Wedge/Bear Flag/Mini H&S Top issue resolved when we broke above 37.63 with the August 15 close of 37.70, that put 39.00 IN PLAY.  Instead of subtracting from 36.26, we ADD to the upside breakout.

Math:

37.63 - August 4 high

36.26 - Neckline

37.63 - 36.26 = 1.37 points

37.63 + 1.37 points = Target: 39.00 IN PLAY

We got to within two cents of the target, to 38.98 (red #1), in just two days.  Since then, it looks like a Bear Flag.

Whether we rally back toward the top of this Bear Flag and the 200DMA and broken May support just above 40.00, or whether we break the Bear Flag this week to the downside, and test the 50DMA, the QQQQ is buliding a nice base here under 40.00 for a year-end rally, or rally in early 2007.

Personally, I'd like a rally here toward 40.00, then a scary October selloff back to 35.54, for a nice double bottom, then some upward bias into the end of the year, establishing a six-month base, then a breakout above 40.00 on a Santy rally come Christmas, or in January.

"The bigger the base...the better the breakout."

Should we get anything nice like that, maxi, we can use your cup and handle as a receptacle for champagne when we ring in 2007. 

[rickjust]

nice couple of days for the q's
breakout today on the 5min chart.
next resistance 40
max

[rickjust]

here is the daily,
maxi

[Ramsburg]

Today's session was «very bullish» for the Nasdaq-100, apart from the major advance, the index made an important breakout to new short term highs, opening a new technical setup and confirming several bullish ideas.

Breakout of the Descending Resistance:
Today's session was a powerful breakout of this price reference, the index had a bad reaction on this resistance in the beginning of the month, at that time it looked like the end of the line, but now we know it wasn't...



Inverted Head and Shoulders already triggered and «In play»:
Perhaps it's not much easy to spot, but there's already an Inverted H&S formation in play, First shoulder was the late June's Sell off; Second Shoulder the end of August's sell off, the Head is located on July's lows; the potential target could be set above 1700 pts. This pattern is not perfect, there were a lot of price reactions after the neckline's breakout, but when inverting the Chart scale it's a bit easier to follow:



I would say that a consolidation may occur, but the main pattern has changed a lot (for better), even when looking to the long term chart:



regards,

[Melf Elf]

next resistance 40

maxi,

That's what it looks like.  The QQQQ penetrated the top of the Bear Flag intraday, but closed smack on it, within one penny.  If it can take that out, 40 looks to be next resistance:

1. 40.00 was the Bear Flag high, on June 2, after the break of 40.16 - 40.19 support.

2. 40.10 was the declining 200 DMA yesterday.

3. 40.16 - 40.19 was key support that broke in May (thick red line)

4. 40.27 - that's about where the 40.16 - 40.19 trendline comes in now.

I still prefer an autumn selloff to even the playing field, but I might not get it. 

While this chart certainly looks constructively bullish, this base is only two-thirds as large as the top that broke in May.  I'll show you what I mean in the next post.

KOMG attempted the same thing in late June, and failed.  I'll show you that, too.

[Melf Elf]

While this chart certainly looks constructively bullish, this base is only two-thirds as large as the top that broke in May.  I'll show you what I mean in the next post.

All trading from about November 10, 2005 to May 15, 2006 occurred above 40.00, roughly, (that's the blue line), so we've got a six-month top with which to contend.  Those candles are playing for the Bears, so to speak.

Everything below the blue line is the four-month base that we've been building since the breakdown.  Those candles are playing for the Bulls, so to speak.

Bulls are outnumbered here.  Not badly, but still outnumbered.  If we continue to base for another two months, that would "level the playing field."  We would have a six-month base going up against a six-month top.

"The bigger the base, the better the breakout," and I would say especially with six-months worth of resistance immediately overhead.

Can we rally directly from here with only a four-month base, back to the January high? 

Certainly.  But, it can be more difficult when the base isn't strong.  We'll look at that next in the KOMG chart.

 

[Melf Elf]

Certainly.  But, it can be more difficult when the base isn't strong.  We'll look at that next in the KOMG chart.

KOMG completed a three-month H&S Top in late April.  In late June, it attermpted take a two-month base, and rally against the stronger top.

Was it possible for KOMG to succeed?  Certainly.  In fact, I played it long with a stop in the low 41s. Our buddy, Joet, asked me about why I played, with resistance right overhead.  Very astute question. 

Bases don't always have to be the same size as a top, in order to succeed.  But, "the force isn't with you," if the base is smaller.  I thought KOMG had a chance, but I used a tight stop, and got stopped out.

KOMG failed at the top of a Bear Flag, within six cents of the April Right Shoulder.  Confirmation of the failure was the break of the Bear Flag, the re-test of the neckline right before earnings, then the killer gap down to 42.50 on earnings.

So, looking at KOMG as an example, if the QQQQ breaks out above the low 40s in this time-frame, we aren't necessarily out of the woods, if you see what I mean. 

[Melf Elf]

Curious spike yesterday, to 40.22.    

The QQQQ, otherwise, didn't trade anywhere near there, but they're letting it stand.  That's pretty close to the 40.16 - 40.19 trendline from broken support last spring.  (Next chart).

[Melf Elf]

The QQQQ got to within about five cents of November, 2005 - May, 2006 resistance yesterday (solid red line).  The 50 and 200DMAs are badly inverted.  That doesn't mean that we can't go higher. 

It only means that the QQQQ isn't "in gear," and that it might be a little more difficult to rally from here, with this four-month base going up against that six-month "overhang" of resistance.

[joet]

Fantastic analysis, my brain is swimming.  Applaud
Lets see where the Nasdaq goes  I am hping that AKAM bring it down a little in the near future
cheers Joe