Monday, December 15, 2008

Nasdaqs Leading the Way Again; Dec. 15, 2008

Again, the Nasdaq 100 is telling us where the short term market trend is. Above is a chart showing the Nasdaq 100 (orange line) and the S&P 500 (red/green candlesticks). As you can see, the Nasdaq 100 is trading much lower and therefore weaker than the S&P early this morning. This suggests further weakness in the market ahead, for the very short term at least. Until the Nasdaq cross back above the S&P, this market is short term bearish. But I'm not getting too bearish this market yet by any means. Breadth is a modest 60% down volume and 2-1 decliners to advancers. Until I see the breaking to new lows on solid breadth and volume, I have a slight bullish bias on this market.

I still see the S&P rallying to the 950 area before it tops and rolls over big. That will present the best and clearest opportunity to short heavily.


Anonymous said...

"Nasdaq 100 Leading the Dow and S&P; Dec. 11, 2008"

I used that guideline today and it is really true. Now I am waiting for it to cross over before I cover my short and go long because you still think the s&p is going up. :)

Todd S said...

In the very short term, waiting for a cross over might be too late and cause a big loss. I will be watching the NDX to soar, and breadth to strengthen for a few minutes and will try to anticipate the rally.

So once I see NYSE advancers and up volume soar, along with the NDX, it might time to cover my shorts. Waiting for the crossover is good for my longer term trades, but for the quick buck in the immediate short term I'm watching for the spikes