Dow vs. Nasdaq: Who Will Win?
The SPU is caught in the middle between the selling seen in the DJU and the buying in the NDU. Volume has been relatively modest across the equity index complex. There has been talk of one dealer buying the NDU and selling short the SPU on behalf of a hedge fund.
Our session low of 1485.60 lies just above the key 1485 level that should provide the last line of support before the market tests yesterdays low of 1479.50. However, I think the tech stocks and the NDU will have to tick lower if this scenario is to develop. I think the more likely script has us chopping around between 1487 and 1494 before a late session rally takes us to 1505. If I’m wrong it will most likely be due to a turnaround to the downside in the Nasdaq. Remember, below 1485 my bullish bias is gone for today’s session and we should trade to yesterday’s low and possibly towards the 1473 gap area left over from last Friday.