| Technical Analysis NASDAQ $SPX $INDU $NDX |
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| Thursday, April 20, 2006 |
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Nightly Update - SPX, COMPQ, INDU, & NDX
S&P 500 chart (SPX) - Daily chart
Today we have new 52 week highs on all indices. The SPX made a new 52 week highs today at 1318.16 and on strong volume as well. As you can see from the chart, the SPX has been trading sideways and consolidating above the ascending triangle. The SPX has taken out key resistance at 1315 which is confirmation that 1334 is the next price target. The SPX remains in a bullish trend reversal. Today the SPX is up 0.12% at 1311.46. Indicators are moving up along with price.
The Nasdaq Composite (COMPQ)- Daily Chart
The daily chart of the COMPQ illustrates that it has broken out of an ascending triangle pattern. However, the COMPQ is now pulling back on low volume to back test support at 2300. The COMPQ bounced off the uptrend line, so no head fakes here. Leadership stocks are still lagging which indicates the COMPQ is not out of the woods.
The broader market is at a technical inflection point. This means that a big sustainable move is coming in the future. I believe that we are transitioning to a fast moving market. However, I do not know if this move is going to be sustainable up or down. I do know that the COMPQ is going to 2400, but it could go lower first. If all up trend lines are broken then that is another story. At this inflection point, the best course of action is too manage your positions and get into stocks that work regardless of their respective indexes and the broader market.
As stated earlier, the divergence within stock performance in general is huge. Look at the divergence between the performance of NVDA versus INTC. Also look at the divergence in performance between the NDX and NEM whilst gold is making 52 week highs. Bottom line, this is a stock picker's market. This is a market where not much makes sense and it is demoralizing to traders. Well, don't forget to keep the big picture in mind. The big picture is that we are still above the uptrend line.
The Nasdaq 100 Index (NDX) - Daily Chart
The daily chart of the NDX illustrates that it is in a cup and handle pattern. I am waiting on the NDX to make new 52 week highs. The NDX is lagging the rest of the market. The sectors that need to improve and that need to gain strength are the Chips and Large Caps. A rally in the NDX will not be sustainable without them. Indicators and oscillators are bullish. Price target is 1900. We are on the verge of a big move.
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