The Stock Market Week - 5/16/2008 | ||
| It was an up week for the major markets. For the week the Dow Jones Industrial Average gained 240.92 points, or 1.89%. The Standard Poor's 500 Index gained 37.07 points, or 2.67%, while the Nasdaq Composite gained 83.33 points, or 3.41%. | ||
Nasdaq Trend Analysis | ||
| QQQQ Long-term technical analysis: Our long-term outlook has not changed. We consider two possible scenarios: Scenario 1. The long-term uptrend (10/08/2002 - 10/31/2007) is over, and a new long-term downtrend started on 10/31/2007. The sub wave 2 (0/31/2007 - present) is currently in progress and almost completed. The sub wave 3 down should start soon and break the long-term support trend line around 43ᇀ, and then it'll go lower than the recent low of 41.05 and move down to about 35 in the late fall. Scenario 2. The long-term uptrend that started on 10/08/2002 is still in progress, with sub wave 5 currently in progress. The wave 5 is usually tricky. It might be truncated and form a double top pattern or not even reach the previous high - 55.07. Which scenario we are going to see may depend on how successful the FED's rate cut would be. The FED's market regulation supposed to weaken the upcoming recession, but FED should not use their power to turn the recession into a new bull market. If FED overdoes the rate cut, we may see the scenario 2. With this scenario, by the end of the wave 5 FED will not have enough room for a new rate cut, and the next long-term downtrend would be even more severe. | ||
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| QQQQ Short-term technical analysis: Last weak we suggested that, if support holds, the QQQQ might reach the channel resistance. The QQQQ rallied from the support level and gained 3.73% for the week and reached 50.11 on Friday. The rally from 41.05 (3/17/2008) to 50.11 (5/16/2008) is close to Fibonacci 62% retracement. Weekly and daily Lane's Stochastic is overbought, while daily William's Percentage Range (W%R) is strongly overbought. MACD has bearish divergence. The rising channel resistance level is near 50.6. The resistance should hold, and the price might move down toward the support level 48.08. | ||
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| Presented by www.thegreedytrader.com Research Group. | ||
Sunday, May 18, 2008
QQQQ technical indicators are overbought
