NASDAQ & SPX: Targets

As we've frequently discussed, pay attention when a validated trendline gets taken out because it usually has some significance. When we looked at the NASDAQ a week ago, we knew that we had an EXACT trendline validation, at 1495, on February 12 (Purple #5).

Tuesday morning, the index opened below it, at 1489.12, briefly rallied to a high of 1492.82 which still was below the 1495 validated trendline, leaving a gap on the chart AT the validated trendline, and that was all she had. Down...down...down...

Both the 1460.51 and the 1434.08 targets got MADE.

In the SPX, the Symmetrical Triangle target came within four points of getting MADE. As we've also discussed many times, targets aren't exact. When you get tha-at close to a target tha-at quickly, take the money! "Don't step over dollars to pick up pennies."

In the Ichimoku Kinko Hyo chart ("At A Glance...The Table Of Balance"), we can see that the SPX put in a Bullish Hammer on Friday which, at the moment, is Data Point #4 of a downward sloping channel. That candle only is bullish, of course, with upside follow-thru. On a rally, former support "should be" resistance.

Last meaningful support was the low of the broken Symmetrical Triangle, 804.30, so that now becomes first meaningful resistance, although the SPX certainly could fail below that level. Given the "dead drop" nature of the selloff from the broken Symmetrical triangle, and given how short-term oversold we got, I'd expect the SPX to make a bid for 804.30 resistance this week, or close to that. 800.38 is a .382% retracement of the selloff from the February 9, so 800.38-804.30 seems to be a reasonable expectation on a rally.

On a strong rally, the bottom of the broken Symmetrical Triangle and the top of the Channel off the early January high converge at roughly SPX 833, on March 2. That would be DOUBLE resistance there.