Pay close attention to the trendline support off June lows for QQQQ (NDX) (see chart). It sits at around 37.45 and the same support was successfully tested with a bounce by NQ (NDX e-mini futures) on Friday (see Friday post). This is reassuring for bulls, but should that trendline fail, it brings about the very real possibility that the rally we have seen was a large, but nevertheless clear bear flag. Watch NQ futures overnight. The 1542 level must hold. My guess is it will and the bear flag will be invalidated, but use caution until we clear out of this pattern. We went from an equity pc ratio of .46 on 6/29 to .71 on 7/5, quite a shift as bears started piling on again and as I suggested in my last post, it could work in the bull's favor. They just need some good news and fast.
This entry was posted
on Sunday, July 09, 2006 at 8:13 AM.
