Sunday, September 6, 2009

The Major lines in the sand ($NDX)

My last post is just that "speculative", I am not saying the market is going to follow that pattern over the next several months.
(although would not be shocked if it did)

I do strongly believe that the $NDX (NOT the comp, rut, indu, tran, spx) is the clear market leader for many reasons. (2 links below w/ rationale as to why)

- the spx head and shoulders "failed" break down was also a simultaneous clear BUY signal for
the NDX
- the ndx was the ONLY index that made a higher low in March 09, compared to Nov 08
- the ndx is the only index ALREADY back at "pre-lehman" levels here

I am short the NDX (via QQQQ) here into major confluence of resistance, for a short term trade
(target of 1595):
(chart above, as it has the cleanest support/resistance lines compared to other indexes)

- IF the NDX can break 1668.57, the next resistance up is at 1790
- IF the NDX can break 1790, the next lines appears to be not till 1995
- IF the NDX can break 1995, it looks to be destined for 2055.82

And those are the key levels I am watching to see the duration, and magnitude of this rally. The NDX performance as the leading index has proved itself over and over again all the way since from the bottom.

Shall see, I have no CLUE where the market will be in 2,6,12 months. My gut says lower
The only thing I can do, is play the chart, by scalping at key levels, with pre-defined stops, for quick swing trades.
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