Nasdaq Comp Gaps and Reversals Thread

Trade_Ideas · Aug 26, 2004

More Up Remaining

My system suggests we move up further from here after 2 days of range expansion.
200 Day Moving Average: $1,441.6867
50 Day Moving Average: $1,408.0064
20 Day Moving Average: $1,355.5455

http://www.trade-ideas.com/StockInfo/Index_NDX.X/NASDAQ_100_INDEX.html

tradesmart · Aug 30, 2004

Interesting comment and great website referred to above by Trade_Ideas – well worth a look…….

The rising wedge triangle from the chart posted last Thursday has yielded a good retracement as noted as very likely then, with ND on RSI showing the way down as it reliably does…

(but rising wedge triangles can precede an upside move when the market is rallying off of a bottom, so the ‘market phase' needs to be taken into account' before taking a position on this pattern)

The Naz is still above the 100ema as shown on the 60min chart, so despite todays downside, the bulls are still in charge imho……

tradesmart · Sep 13, 2004

A very bullish performance from the Naz recently, having broken out north from the 6day long triangle of indecision – itself riddled with gaps and reversals…..

But now after an over 50point rise in 3 sessions, we are in the 1918 area, which has been a key S/R level previously – ND is prevalent on RSI and there is a gap to be filled just below 1900…..I doubt that it will be ignored for long………

tradesmart · Sep 14, 2004

Still holding onto most of it’s recent gains, but short term the Naz looks kinda bearish to me……..hovering over that gap crying out to be filled…….major support some way below at 1875 ish……

Tech major Oracle reporting after the bell may well influence tomorrow’s performance ………

Edit re: Oracle - "License revenue came in at $563 billion, meeting the low end of the range expected by analysts"

low end of the range.....what, not perfection....!?......that could cause problems.......

tradesmart · Sep 16, 2004

Well, the gap from Monday mentioned in the post above got filled yesterday when the Naz joined the other indices in a minor tanking, but that minor tanking caused an opening gap which just had to be addressed (filled......!) today – so the Naz has done a ‘return trip’ to do the job, then a swift return to a southerly direction signalled by ND on RSI…

Sometimes the Naz fills gaps immediately, and other times it might leave it several days to return…….unfilled gaps might signal an ‘Island reversal’ – a powerful trend change signal……………divergence on RSI almost always signals changes of direction, whether in an intraday or in a longer timeframe….

Signals from the Nasdaq Composite charts can invariably be applied to and traded via the QQQ’s Nasdaq tracker or NDX Nasdaq 100…

Very often reversals on the Naz happen ahead of the other indices and can act as an ‘early warning’

All imho of course……

Edit – the 60min chart shows that the index is running north in a clear parallel uptrend channel and is currently creating a triangle under one of the major trendlines linking the highs of the year……….breakout due soon……?

tradesmart · Sep 20, 2004

Perhaps the apparent Inv H & S - target in the 2040's, is worthy of note......?

just perhaps............

tradesmart · Oct 4, 2004

The Inv H & S scenario mentioned above seems to be playing out quite nicely, and with a lot of bullish impetus currently propelling tech stocks (will they be less affected by high oil prices?) it seems that a test of 2000 at the channels intersection might happen sooner rather than later…..

I note that the Naz is currently hovering over two gaps, and that seems like one too many – imho the top gap will get filled very quickly, possibly today……

FetteredChinos · Oct 4, 2004

hope so TS

nice charts as ever.

how do you cope with so many lines on them though?

or do you only pay attention to the more recent points of S&R ?

FC

tradesmart · Oct 4, 2004

FC – most of the horiz lines are just my ongoing mark-up of S/R levels past and present…..as with most things, I tend to go a little OTT with them….. :cheesy:

They all come in useful, but every now and then they get so dense that I can’t read the chart properly and have to have a purge……!......

FetteredChinos · Oct 4, 2004

ah thanks. with so many lines, it could make it untradeable, unless you were scalping for a point here and there!!

tradesmart · Oct 4, 2004

FC - the lines are only a guide as to where the index has found S/R in the past - I only trade it generally when S/R is confirmed by RSI divergence...

I like trading it via the QQQ's Naz tracker stock for multi-day/week trades.......the chart moves/signals are identical to the Naz Comp, but you can trade it in extended market hours....

The percentage moves tend to be much bigger than the Dow/S&P....

ie:- Dow 5.4% above August low/Naz 12.3%.........

tradesmart · Oct 8, 2004

It resisted for longer than expected, but one gap filled and one to go, which is likely to drag the other indices down further as well imho………..

A nice tradeable move though, just on the simple basis that 'gaps get filled'............ :cheesy:

most of the time............

tradesmart · Oct 13, 2004

As mentioned above, a bearish outlook in place at least until the lower gap from 1st October is filled imho…...

Quercus · Oct 13, 2004

Hi, TS
I just wanted to note some appreciation for your continued posting on this thread, I always check it out when you add to it!
The chart's looking a bit messy isn't it - not too many clear signs on the 5min. Maybe the make-up is getting thrown around in the dressing rooms of the theatrical extravaganza know as the US elections? I wonder how many re-counts we'll need this time in order to get the result that democracy calls for?
Cheers
Q

tradesmart · Oct 13, 2004

Hi Quercus – I’m always a bit surprised when someone replies on this thread – I can talk to myself about the Naz all day……..!!!..............

Perhaps Naz himself will turn up one day and tell us where it’s really going……he’s got a reputation for calling it ‘right’…..

Consider this an invitation Naz.......

Re: the US elections – all we need is a few “hanging chads” and we’ll have recounts galore……..

(or will it be a hanging Bush…..?!…….too close to call imho….his debating skills don't seem to have improved despite the suspicious (alleged) 'prompter' under his jacket.......)

The Bush campaign dismissed the claims, saying it was just a wrinkle in the presidential jacket...............

Regards

tradesmart · Oct 25, 2004

As mentioned in post #53 above, the Oct 1st gap just had to be filled, but it took the Naz over 10 days to get there…..!!

Once the gap had been filled the index took off on a minor foray north, but now things are looking bearish with a break of the lower uptrend line originating from the 1750ish low of mid August………

maxpain · Oct 25, 2004

Up tomorrow - won´t last long though IMO..

NDX100 P&F
Nasdaq
DOW

tradesmart · Oct 27, 2004

Just as things were looking bearish, a stampede of bulls arrive, and a ‘handbrake turn’ later, we’re now equalling the recent highs at 1970………

Pronounced PD on RSI as the price hit support at 1905 was the clue to try a long, but only a supreme optimist would have expected the trade to make 65 points in just two sessions...!?

RSI still reaching for the heavens, and will be looking for a consolidation to form at the highs until the next catalyst determines direction…….

tradesmart · Nov 2, 2004

The Naz still in overdrive and a bullish, but short lived breakout to 2000 today; above the all year long upper major trendline originating from the 2150 high last January……

ND on RSI leading the way to a sharp (apparently) Kerry-bear inspired reversal late in the session today, and perhaps we can expect more volatility in a tight range until a clear winner emerges from the election contest….. ?.......

tradesmart · Nov 9, 2004

Perhaps the apparent Inv H & S - target in the 2040's, is worthy of note......?

Well, it’s good to know that the t/a calcs work from a long way out, and can be immensely profitable if you have the patience to stick with your position (that’s the difficult bit…...

)

However, the Naz, like the other indices, looking ever so slightly overbought just now, and with a divergent RSI ‘top’ on the radar and two unfilled gaps under; will be watching for some sort of retracement very soon…..

Ps - CSCO has just reported after the bell and the stock has tanked – this makes tomorrows prediction for the Naz quite easy…gap fill mode imho…..

edit - CSCO chart attached...

Nasdaq Comp Gaps and Reversals Thread

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