What would increase the bearishness in the Nasdaq today and going forward?
The NASDAQ index fell -408 points at one point in trading today. It is currently down -334 points or -1.80%. That is its worst trading decline since April 30 when the index fell -2.04%.What did the decline do from a technical perspective?The low price in the Nasdaq index today reached 18238.78. That was good enough to get the price below its 50-hour moving average at 18273.95 (black line on the chart above). However, the price was not able to get below the 38.2% retracement of the last trend move to the upside that started on June 24 low. That 38.2% retracement comes in at 18222.50.If the price on a correction, cannot get below the 38.2% retracement of the last trend move, are the sellers winning? The answer is NO. The correction is just a normal, plain-vanilla variety in what is a bull market. The buyers are winning. So going forward, to increase the bearish bias, watch that 38.2% retracement for clues for increased bearishness from a technical perspective in the Nasdaq index. Moving below increases the bearish bias, and traders would start to look toward the 50% midpoint of the same move higher at 18083.94. They would also target the rising 100-hour moving average (blue line on the chart above) which is currently at 18008 and moving higher toward the 50% midpoint IF that 100-hour MA and the 50% can then be broken, it would further increase the bearish bias for the index. By the way, the low price going back to July 1 stalled right at the 100-hour moving average before bouncing back to the upside. On June 24, the low price reached 17494 when the 100-hour moving average at 17441. Although 53 points from each other, it showed the buyers willingness to step-in ahead of that key moving average. That is what happens in a bullish market. THE SUMMARYWith the 38.2% holding support today, the buyers have done their job. Those buyers bought against the 38.2% and have been able to halt/stall the efforts of the sellers. As a result, the buyers are keeping control and still winning. The sellers? They failed on the first test and are still losing. This article was written by Greg Michalowski at www.forexlive.com.
The NASDAQ index fell -408 points at one point in trading today. It is currently down -334 points or -1.80%. That is its worst trading decline since April 30 when the index fell -2.04%.
What did the decline do from a technical perspective?
The low price in the Nasdaq index today reached 18238.78. That was good enough to get the price below its 50-hour moving average at 18273.95 (black line on the chart above). However, the price was not able to get below the 38.2% retracement of the last trend move to the upside that started on June 24 low. That 38.2% retracement comes in at 18222.50.
If the price on a correction, cannot get below the 38.2% retracement of the last trend move, are the sellers winning? The answer is NO. The correction is just a normal, plain-vanilla variety in what is a bull market. The buyers are winning.
So going forward, to increase the bearish bias, watch that 38.2% retracement for clues for increased bearishness from a technical perspective in the Nasdaq index. Moving below increases the bearish bias, and traders would start to look toward the 50% midpoint of the same move higher at 18083.94. They would also target the rising 100-hour moving average (blue line on the chart above) which is currently at 18008 and moving higher toward the 50% midpoint
IF that 100-hour MA and the 50% can then be broken, it would further increase the bearish bias for the index.
By the way, the low price going back to July 1 stalled right at the 100-hour moving average before bouncing back to the upside. On June 24, the low price reached 17494 when the 100-hour moving average at 17441. Although 53 points from each other, it showed the buyers willingness to step-in ahead of that key moving average. That is what happens in a bullish market.
THE SUMMARY
With the 38.2% holding support today, the buyers have done their job. Those buyers bought against the 38.2% and have been able to halt/stall the efforts of the sellers. As a result, the buyers are keeping control and still winning.
The sellers? They failed on the first test and are still losing. This article was written by Greg Michalowski at www.forexlive.com.
