NASDAQ: Taking A Fresh Look

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Looking at this Ichimoku Kinko Hyo chart ("At A Glance...The Table Of Balance"), we can see that the Kumo (Cloud) Resistance represented by the vertical lines is just overhead, and that "The Table Of Balance" strongly favors The Bears. "At a glance," we might want to call that Kumo a BRICK WALL, rather than the less daunting sounding "Cloud." In general, thick resistance like this is difficult to overcome, as evidenced by the past five sessions since the Bullish Falling Wedge breakout. It's been sideways-to-down trading at the bottom of the Kumo as the Bulls try to muster strength for a rally attempt into Kumo resistance. Let's look at the next chart, to see what the Bulls have got.




I've done a "redraw," removing the rising channel in red (see yesterday's chart) in an effort to see if there's something else going on in the chart that I might be missing. It's arguable that we've got an Ascending Triangle (in green), or even one of William O'Neill's "Cup & Handles," with an Ascending Triangle "fractal" (repeating pattern) that has formed since December 9 (pattern in purple). The pattern in purple would be the "handle" of the Cup & Handle, and it has formed on low volume, as it should.

If that's the case, the NASDAQ currently is looking for Data Points #4 for BOTH patterns: a final low, prior to a breakout. If we go a little lower here, the pattern in purple could morph into a Bull Flag, then break out. If we go much lower, the Bulls' case is seriously weakened.

Again, that Kumo (Cloud) represents solid resistance, but an upside breakout would be out of Triple nested patterns: (1) The Bullish Falling Wedge in blue, (2) The Ascending Triangle/Cup & Handle in green, and (3) whatever pattern we've got here in purple, so there at least is a reasonable base from which to launch a rally attempt.





The 55/89 RSIs still are at Bullish Synchronicty. The 55 is at 43.8136; the 89 is at 43.7989, so the difference is only 0.0147, which is very tight. That kind of compression can have an effect similar to a tightening of the Bollinger Bands, and can produce a nice move if it can kick higher out of the synchronicity. A print today of 1548.45, above yesterday's high, would be a technical buy signal from this particular indicator.

Bottom line: Price rules. Bulls need to take out NASDAQ 1603.