Day Trading – The Bullz And Bearz

NASDAQ Has Room To Run Before 2,000

July 19th, 2009

Hope everyone is enjoying their weekend. I spent most of my time earlier this morning looking over my hundreds of charts trying to get some feeling of the market after last week’s crazy actions. Of course nothing is as clear as I would like it to be but that’s why most people can’t make money trading right? I mean if it was crystal clear then everyone would be on the right side. However, the general theme I found was this: there is still room to move higher. Even in the fact of ridiculous pressure on the economic front as well as job front, the markets were resilient last week. Whether you agree with the move or not, we have to realize that there actually may be more room above us.

 

Now my word of caution: don’t get too crazy long. While I think things could creep higher over the next week, we are entering MAJOR resistance zones. Per the NASDAQ chart below, you can see in GREEN that it could absolutely move into that area next week.

 

 

BUT! 2,000 is the 50% retracement level from the top of the market back in 2007 – i.e. the MOST important and strongest retracement level. In addition, you can see that the same 2,000 level has been major support in the past which means it will be even harder to break. Even with all the recent strength it’s looking pretty toppy to me. I’ll let you all take from this what you will – these are just my thoughts using the long term charts.

 

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