NDX bullish percentage index tells us we could have further downside. Breakdowns from moves above 70 in the past three years have never resulted in a bottom at 55, the current level. The one bounce we had from 47 in 2005 was off a high 63, which itself was part of a corrective bounce off a 33 low. Per this chart, we should drop to the sub 40 level, at the very least.
That does not mean we can't have powerful short covering bounces, in fact, that NDX gap at 1800 could very well be visited this week. But they could be of the "blink and you miss" variety. Per my earlier post on possible Fed action this week, we could be in for some very volatile movements the next five days, and for traders, it does not get any better. The ideal set up for bulls would be a complete washout Monday and Tuesday, followed by Fed cut talk on Wednesday.
This entry was posted
on Sunday, March 18, 2007 at 3/18/2007 01:47:00 PM.
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