The 15th Round Again
Sometimes trading this market is like being in a
prize fight with the heavyweight champion of the world. You’ve got punches
flying at you from everywhere and every day seems like the 15th round. For many
traders, they’ve been pummeled and they’re running out of gas.
But if you’ve been listening to the advice of your trainer while sitting in
the corner between rounds, Monday’s move in the Nasdaq
(
$COMPX |
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PowerRating) quite
possibly would not have been a surprise to you.
The Nasdaq came up against a combination of technical factors intraday:
The old broken resistance near the 3000 level.
A four-week descending trendline.
It’s 50% retracement off Nov. high and low.
Perhaps you did you homework over the weekend and saw this triple layer of
resistance.
Here’s another interesting chart.
While the the Nasdaq has been plummeting lately, Abott
(
ABT |
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fighting its away upwards. This is an example of relative strength that is
clearly visible in the charts. In these instances, a stock like ABT is likely to
receive an extra boost well beyond his existing power if the Nasdaq were to turn
positive for an extended period of time.
Monday’s pummeling continues to wear the average out and give the impression
that a tradable rally is not in sight. The stage might be getting set for the
unexpected.
From ringside,