It’s all good considering the markets haven’t been able to muster any
strength since. So, where do we go and what do we do from here? At this
point, it depends on your timeframes, goals and strategies.
When we take a step back and look at the monthly chart of the NASDAQ Composite here, it becomes quite evident the index has gotten extremely far away from its 3X3 DMA (blue line). That’s not good for the bulls in the near-term, especially since the markets sort of fell apart late Thursday.
When we drill down into the weekly chart, you can also see some key retracement levels back to the downside, of which the first level sits right around 5,600. Assuming these markets continue lower throughout the rest of April, we suspect that’s where we’re headed.
We’ve also pointed to that March low here, which was very significant at the time. We’re assuming if that level is breached, we’ll likely see a bounce around 5,721. How long the bounce lasts will be the key though, because if it completely breaks down on any sort of relief rally, the index is most definitely headed for the 5,600 level, which we suspect could end up being a very pivotal bottom for the year.
The bottom line at this point is if the NASDAQ cracks Thursday’s low, we suspect it will find its way to 5,721. From there, we’ll have to see how it plays out. Conversely, should the NASDAQ hold Thursday’s low and somehow manage to take out Thursday’s high, these markets will have saved themselves yet again.
How does this translate to the S&P 500 or the DOW Jones Industrial Average? Below are daily charts of both. If the NASDAQ does end up moving lower, we’re likely looking at a move on the S&P 500 to somewhere around 2,298 – 2,280, and on the DOW somewhere from about 20,248 to potentially just below 20,000.
When we take a step back and look at the monthly chart of the NASDAQ Composite here, it becomes quite evident the index has gotten extremely far away from its 3X3 DMA (blue line). That’s not good for the bulls in the near-term, especially since the markets sort of fell apart late Thursday.
When we drill down into the weekly chart, you can also see some key retracement levels back to the downside, of which the first level sits right around 5,600. Assuming these markets continue lower throughout the rest of April, we suspect that’s where we’re headed.
We’ve also pointed to that March low here, which was very significant at the time. We’re assuming if that level is breached, we’ll likely see a bounce around 5,721. How long the bounce lasts will be the key though, because if it completely breaks down on any sort of relief rally, the index is most definitely headed for the 5,600 level, which we suspect could end up being a very pivotal bottom for the year.
The bottom line at this point is if the NASDAQ cracks Thursday’s low, we suspect it will find its way to 5,721. From there, we’ll have to see how it plays out. Conversely, should the NASDAQ hold Thursday’s low and somehow manage to take out Thursday’s high, these markets will have saved themselves yet again.
How does this translate to the S&P 500 or the DOW Jones Industrial Average? Below are daily charts of both. If the NASDAQ does end up moving lower, we’re likely looking at a move on the S&P 500 to somewhere around 2,298 – 2,280, and on the DOW somewhere from about 20,248 to potentially just below 20,000.
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