There is enough skepticism out there to support a decent rally, but we have a minefield of economic data next week. Frankly, I think the Feds are done for now and will say so in June. "Kansas City Fed President Tom Hoenig said in an interview with the Wall Street Journal that the Fed is well aware of the risks of overshooting on interest rates. He said he expects core inflation to moderate despite the 0.3% increase in the core consumer price index for April reported earlier this week.
"Let's maybe be a little bit patient here, and then decide what the right course is," Hoenig said.
But that is in June. Right now, let's see how any rally behaves. NDX 200 dma is at 1650 which is right above ex-long term trendline support, now resistance (1635)(see chart). Of all the numbers, I will be watching that the closest. That should be NQ 1640/1650. It is absolutely critical to get back above that and stay there. Failure to do so will usher in the possibility of a retest of October 2005 lows for QQQQ. If long, I strongly suggest you take partial profits at 10 day ema, right at that trendline and take a wait and see attitude (QQQQ 40.16). It's a nice trade from here, so don't get too greedy.
This entry was posted
on Friday, May 19, 2006 at 5:35 PM.
