Thursday, March 4, 2010

NASDAQ Composite

Yesterday the potential harmonics of the S&P and Russell 2000 Indexes were shown. Below are two charts of the NASDAQ Composite.
  • The first chart shows the bear market that began Oct. 31, 2007 and terminated on March 09, 2009--a period of 495 days. 61.8 pct. of 495 is 306. 306 days from the March 09, 2009 low is Jan 08 2010. The NASDAQ reached the highest point since March 2009 on Jan 11, 2010.
  • A 61.8 pct retracement of the bear market range (2861.51-1265.62) is @ 2251.88
  • If the initial thrust off the March 09 low is extended by 1.618: (1879.92-1265.62)*1.618 = 2259.56
  • Note how the initial lows of March and July 2008 were in the vicinity of the above noted 61.8 pct. retracement level
  • Note that the high of the recent A-B-C structure detailed in the chart below is 2251.68
click chart to enlarge

The chart below is a much shorter time frame.
  • The rally culminating from the Feb 5th low has a harmonic cluster in the area of the recent trading range. If the pattern is notated as an A-B-C structure, there is the distinct possibility that the 2292-2293 area could offer resistance.
  • If the rally continues further resistance could be expected near the 2350 area (BC would equal XA)--or--slightly higher than the high established on January 11th @ 2326.28
  • Note the double spinning tops candlestick formation in the last 2 trading days. This suggests that the market is possibly stalling at this level and could turn lower.
  • The behavior of the NASDAQ at the 21 and 55 day exponential moving averages will be important to monitor for clues of renewed market strength or further--and possibly troublesome deterioration in the market.

click chart to enlarge

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