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A Look At Nasdaq Futures

Tyler Durden's picture




 

Courtesy of Nic Lenoir of ICAP

 

We take a look at the Nasdaq futures this morning. While I was away the market challenged an important overlap at 1674 (we made highs at 1670) which corresponds to the lows of March 2008. On the daily chart we suggest an Elliott wave breakdown for the bear market suggesting an upcoming wave 5 lower. This count is not our favorite scenario, but it would reinforce a lot the significance of 1674 as there cannot be a violation of the lows of wave 1 in order to validate this structure is indeed the one the market is following. The reason why this is not our favorite scenario is that the market would have followed the same structure for both wave 2 and 4, which doesn't respect the rule of alternance.

Our base case is the one highlighted on the weekly chart, basically stating we have completed a bearish impulse in March 2009, and we are currently in a corrective bullish phase ahead of the next bearish impulse. What is interesting is that the 200-week moving average and the former support trend are both resistances right around 1700 and just above the 1674 level. For now on the day we are painting a bearish reversal candlestick, but there is a lot of time left in this session. We would favor shorting the Nasdaq as long as the future remains under the 1674 resistance on a daily close.

The bulls state we started a new bull market in March, which I give a probability of maybe 5%, but even if that is the case, the market always retraces 5% of the first bullish impulse, which right now would take us back to 1347.

Good luck trading,

Nic

 

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Tue, 09/08/2009 - 11:23 | 62229 Sardonicus
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as long as the dollar gets more worthlesser every day, then nothing else matters.

 

Tue, 09/08/2009 - 11:29 | 62238 Anonymous
Anonymous's picture

I'd like to see a lot of this analysis done adjusted for dollar moves, as this could be highly relevant going forward. Anybody know if there is a source for this?

Tue, 09/08/2009 - 12:17 | 62320 Anonymous
Anonymous's picture

From Elliott's Hochberg:
The [U.S. Dollar Index] remains above 77.75, somewhat to my surprise. Prices tenaciously cling to the nascent uptrend that started at the August 5 low (77.43), but looking at the near-term subdivisions, it’s not clear that they will be able to remain above this low. Still, since the close of August, gold is up almost $45 while the dollar index is flat-to-up too, from 78.17 to today’s close of 78.33. As we’ve been saying, as long as the dollar holds above 77.75 it retains the ability to continue to push higher. However, if prices breach 77.75, the odds would favor a decline to at least 77.00, possibly lower, prior to bottoming. We almost never second guess the wave structure, but instead let it unfold and analyze it in real time as it does. But it is hard to see how the dollar does not break down to a new low in the coming sessions, based on the subwaves since early August.

Tue, 09/08/2009 - 11:23 | 62235 Anonymous
Anonymous's picture

What's the frequency Kenneth?

Tue, 09/08/2009 - 11:30 | 62240 Sardonicus
Sardonicus's picture

Tue, 09/08/2009 - 11:37 | 62250 Project Mayhem
Project Mayhem's picture

wow is anyone else watching the dollar this is amazing

Tue, 09/08/2009 - 11:41 | 62257 pivot
pivot's picture

gotta make sure everyone is on one side of the trade.  dollar => zero, gold => infinity. hurry or you'll be late!!!!!!

Tue, 09/08/2009 - 11:45 | 62263 Project Mayhem
Project Mayhem's picture

prepare for the whipsaw... naw but seriously this has been a pretty big move for one day... i wonder if gold senses something is coming...

Tue, 09/08/2009 - 11:53 | 62276 pivot
pivot's picture

yeah big moves in both.  i trust UST more than gold at this point due to all the retail money.  the house always wins.

Tue, 09/08/2009 - 12:11 | 62301 Gunther
Gunther's picture

PM, for now I see more dollar weakness then gold strenghth.

In Yen gold is 10% below the all time high and right below 3000 Yen/G (ATH=3320.)

Almost the same in Euro 690 Eu/oz (ATH = 782.)

We had such dollar moves few times lately, the always came back, but not completely.

Now even with gold down to 995 the Dollar did not move up.

Is somebody not satisfied with the use of the printing press?

Tue, 09/08/2009 - 13:18 | 62393 walküre
walküre's picture

From the German "floor" in Frankfurt.

Hold the line until this weekend and federal elections. Ensure the current government gets reelected. After that.. all bets are off.

A higher Euro would be a killer to German's export.

German industry is screaming WTF at EUR/USD correlation.

 

Tue, 09/08/2009 - 11:38 | 62252 digalert
digalert's picture

Wouldn't one want to take TA, fundies, e-wave, historics and better judgement and toss em to the curb? darts anyone?

Tue, 09/08/2009 - 11:45 | 62262 Anonymous
Anonymous's picture

No Elliott waves--Idiot Waves

Tue, 09/08/2009 - 12:01 | 62286 Project Mayhem
Project Mayhem's picture

haha

Tue, 09/08/2009 - 11:51 | 62274 Anonymous
Anonymous's picture

I love the moguls in my backyard. Everyday the bags of coins get more valuable. Once sovereign currencies collapse this year then I'll take over the world!!!!!!!!!!!!!!!!!

(or maybe buy a shotgun, bullets, and cellular modem to hide in the woods)

Tue, 09/08/2009 - 12:54 | 62368 Anonymous
Anonymous's picture

1670? I do not see NQ trading that high. The recent high I have is only 1668.5. Are we on same charts?

Tue, 09/08/2009 - 15:00 | 62532 Gabriel Gray
Gabriel Gray's picture

Not a very convincing piece.

Tue, 09/08/2009 - 17:28 | 62778 Anonymous
Anonymous's picture

There is a typo in the last paragraph:

"The bulls state we started a new bull market in March, which I give a probability of maybe 5%, but even if that is the case, the market always retraces 5% of the first bullish impulse, which right now would take us back to 1347."

The "retraces 5%" should read "retraces 50%".

I'm surprised nobody noticed that yet, including the author.

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