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By Mike Paulenoff, MPTrader.com
The Nasdaq 100, as represented by its QQQQ index tracking stock, has been pushed up against key near-term resistance at 36.40, which has been hurdled but needs to be sustained. A sustained hurdle of that level should trigger upside acceleration towards a test of much more important support at 36.80/85.
A hurdle also triggers the potential of a July Double Bottom formation at 35.54 and 35.62, which projects to 37.50/60 and possibly as high as 38.
At this juncture, only a failure to hurdle 36.40 followed by a reversal and plunge beneath 35.50 will wreck the developing base-like pattern.
Moving over to the S&P 500, the overall pattern displayed on the point and figure chart shows a potentially big double bottom formation at 1220-1226, which must hurdle 1280 to trigger upside confirmation that projects to an optimal target of 1320 thereafter.
However, from a near-term perspective, the SPX must claw its way above key resistance at 1262 and 1274 to have a realistic chance to trigger the larger double-bottom pattern.
For the time being my work argues for a hurdle of 1262, at which point we will re-evaluate the upside potential.
Mike Paulenoff is author of the MPTrader.com ETF Trading Diary (www.mptrader.com), a real-time diary of his technical analysis on equity markets, futures, metals, currencies and Treasuries.
Mike Paulenoff is author of www.MPTrader.com, a real-time diary of his technical analysis & trade alerts on ETFs for precious metals, energy, currencies, and an array of equity indices and sectors, including international markets, plus key ETF component stocks in sectors like technology, mining, and banking. Sign up for a Free 15-day Trial!
