The NQ 1619 low held and since it is close enough to a 10% correction, we can assume we have some kind of a bottom put in for the week especially considering the vast amounts of puts sitting at the 40 strike for QQQQ.
SOX lost the 200 dma, but did manage a close above 50% oct 2005/Jan 2006 and a bounce off 61.8% 2004 H/L. SMH closed above the October trendline, and the COMP climbed back up above its 200 dma (2229). Things can change of course, but I now expect some kind of rally up to the 10 day ema for NQ and QQQQ. That would be NQ 1674 and QQQQ 41.18. Since the weekly pivot for NQ is 1670, I would not count on much more than that, at least for this week. There has definitely been some technical damage and what usually occurs in these cases is a "sell the rallies" bias. But don't listen to the media, who are caling for the demise of the tech sector. Frankly, this severe drop in oil is far more bullish for NDX/QQQQ than SPX. That said, if the COMP closes below the 200 dma, batten down the hatches.
This entry was posted
on Monday, May 15, 2006 at 6:30 PM.
