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By Mike Paulenoff, www.MPTrader.com
The enclosed daily chart of the cash NDX shows that the 8/15 rally peak at 1973.56 and the subsequent decline back beneath 1890 appears to represent a (failed) test of the major Oct-Aug resistance line, a reversal from that down trendline to beneath the declining 200 DMA, and a return to test important near-term support at 1870.75 created during the Jul-Aug (near-term) bottoming period. All of this has bearish price implications for the NDX and holders of the Q's ETF (Nasdaq: QQQQ). Inability of the NDX to hold at or above 1874 (also the coordinate of the declining 50 DMA) will be a very negative sign technically and will point prices towards a test of 1800 sooner or later.
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!
