NASDAQ & SPX: Just A Random Walk

In the cash SPX, we knew that the highs of the December 8-January 2 Ascending Triangle were 918.57 and 918.85, respectively. The slight upward slope of that trendline is +0.04, so it came in yesterday at 919.29. Yesterday's low was 919.53 at 9:55AM,, just 0.24 above former resistance, then the market moved higher. That probably was purely coincidental.




In the NASDAQ, the Ascending Triangle breakout was 1603. At 9:55 AM yesterday morning, the NASDAQ put in a low at 1604.83, then that index rallied, too! I don't know about anyone else, but that convinces me that markets are completely random and that no one was really looking at a chart and buying because former resistance was acting as support after a TRIPLE breakout. Nah-h-h...




No, markets don't always behave with that kind of exactitude, and yes, markets do behave randomly at times. Probably most of the time. But, if we can identify those times when the market ISN'T behaving randomly, through whatever tools that we have at our disposal, it's to our advantage.

Both the SPX and NASDAQ had Bullish Crosses of their 20 & 50 DMAs yesterday for the first time since September 15, so on any selloff to the MAs, those are areas to look for support. Below the MAs, next support would be the rising trendlines of the Ascending Triangles. Below the rising trendlines, I'd have a hard time being convinced that there's anything bullish about these charts.

SPX:
20 DMA - 889.23
50 DMA - 887.41

NASDAQ:

20DMA - 1552.20
50DMA - 1550.58