Watch the Nasdaq Channel today!

Have a look at this trend channel on the Nazz, coming to us via Chart of the Day; Note that the trend dates back to the pre-election low in August 2004:


Whenever a trend line or support gets broken, experience teaches us that there is a very short window for trading to get back over that prior support.


Note this trend line break is NOT what I have previously referred to as a Wyckoff Spring — which is a test of support at a low, and not a trendline in a channel . . .

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  1. Mark commented on Jun 9

    Market action this morning is schizoid. As has been the “pattern” lately.

  2. Anon commented on Jun 9

    Interesting, but is that the trend line we should look at?

    If you line up the second point touching the bottom and the third bottom that doesn’t quite touch, that ‘trend’ was obliterated some time back – and hasn’t recovered.
    And if you line up the first bottom point with the third point that doesn’t touch, the break in the ‘trend’ looks much worse.
    So is the Nazz is worse shape than this chart suggests?

    Or is my status as a technical tyro prompting an error?

  3. tjofpa commented on Jun 9

    I’m tryin to watch the nasd today B but its just to boring for a Friday.
    Let’s see… Oil up at $71 but XOM gettin hammered again.
    2nd Recommendation this week on Metals and NEM in particular but it can’t hold a bid. (It was over 54 on Mon)
    I’d say somebody out there in HedgeHOG land is in deep, deep ….!
    Think I’ll go the bar early today.

  4. Nona commented on Jun 9

    “Think I’ll go the bar early today.”

    Which bar, tjofpa? I’ll meet you there!

    ~ Nona

  5. chris commented on Jun 9

    The QQQQ closed at pretty much a BAD level… more pain next week.

  6. Mark commented on Jun 9

    R. Russell reports that even in the midst of Thursday’s remarkable comeback, Lowry’s buying power DECREASED and selling power INCREASED. Lowry’s nailed the top as Barry knows.

  7. whipsaw commented on Jun 9

    I think a lot of people are missing something about the true state of $COMPQ. Open up a weekly chart just using simple lines and set it to a 3 year period. Notice the neat triple top that began forming in late March and continued until May? Triple tops are bad and you don’t have to be much of a technician to infer that it had hit a ceiling. Something bad was about to happen, and the odds are it would involve a trend change rather than a correction.

    Of course the problem with TA is that chart patterns are usually obvious once they are history, much less so as they are forming in real time. But I find it very helpful to evaluate things in multiple time scales and routinely look at how the monthly and weekly pictures appear in order to help filter out the daily noise and because they are far more important.

    Anyway, my point is that nasdaq is very, very sick and is unlikely to turn around anytime soon. In fact, I am looking for QQQQ to break 33 in due course, then again I have puts so what else would you expect from me? :-]

    If you believe that $COMPQ leads the market down and leads it up, what that translates into is bad juju for pretty much everything for a good while yet. I wish Barry luck with his (second now) attempt to catch the QQQQ elevator, but I am more comfortable as a grumpy bear than as a butterfly.

  8. akram commented on Jun 10

    Have to agree with whipsaw. I have tried buying some semis and just to test the waters for that inevitable 10% bounce in the high volatility names when they scrape the bottom, but it has not worked. I gave brcm and mrvl a shot today, and got out quick…though it did work for me on thursday. I find that the market never seems to truelly turn around until its down big into the last hour or two of trading, adn then mounts a furious comeback. I have yet to see that happen. I also don’t see much support in the charts for the semi stocks. This thing could get much uglier.

    Btw, any of you getting tired of hearing how great corporate earnings and cap ex have been. You’d think kudlow could for once acknowledge the fact that the market sell off will come a good 6 months before we see any real major deterioration on the bottom lines. For now i think that it doesnt hurt to try and find the bottom, but i think shorting the morning rallies will continue to be a good idea until the fed at least the cpi number.

  9. Mark commented on Jun 10

    That is an elevator (QQQQ) in a two story building with a multi-level basement.

  10. rick commented on Jun 10

    alot of the great corporate earnings have to
    do with commodity stocks or the infrastructure in
    the commodities and not with the American
    stocks such as MSFT,INTC, etc

  11. bt commented on Jun 10

    Earnings are great NOW, but it appears this is as good as it gets. Some should remind the permaBulls that it is the future that counts for the stock market, not the past.

    akram, I had the same experience with semis. Been trying to trade them and eked out a few profits, but BRCM and AMD have been houses of pain. With their relatively better growth stories, I thought they would hold up better but they seem to go down two days for each day they go up. They start most days cheerfully, up a little in the am and then someone comes along and dumps them. Apparently some mo-mo guys are really stuck holding these, perhaps on margin. And I thought the bubble was in metals! The semis are acting like they are the ones suffering a burst bubble. Maybe that is what it is, the credit bubble is bursting and hedge funds who loaded up on high beta are having to cough up their margin’ed holdings.

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