The COMP did not quite close the July gap, but did hit minimal projection off August high/low at (23.6%) and retreated, closing with a Doji. Don't forget that tomorrow is option week Thursday, a noisy closing day for SPX options.
NDX, on the other hand, did close that gap after coming within 4 points of the 2007 highs, which would qualify as a double top if we retreat from here. The previous Sepbember high of 2032.10 held up today and is key for bulls in the coming days if they want to knock out the July highs. Remember, it's the close that counts.
I know many of you want to hit it short now, but unless you know how to cost average in and out of a futures contract (or put on complex option strategies), I strongly recommend you respect the tape and wait for that NDX close below 2032, or a higher with a bearish divergence and a bearish close. Today almost qualified, but that bounce off 2032 should keep you honest, or at the very least incremental. If you did catch the high (you were given the NDX gap close warning intraday, after all), lower your stop to even and let the markets decide. These post Fed rallies are often a two day affair, so it should be a good trade if crude holds up. Oil's parabolic rise is keeping the TRAN below its 200 dma and putting the brakes on techs.
This entry was posted
on Wednesday, September 19, 2007 at 9/19/2007 09:14:00 PM.
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