NQ overnight update
Overnight session:
NQ does the deed and drops the July lows (1765.25). On the daily chart, you can see that we found support at 76.4% Mar/Jun (1761.75). We are also 7% away from the 20 dma (green line), usually a strong buy signal, even if only for a corrective rally. Another striking number is the current low of 1760.25, exactly 5 points below the July low, which is where thousands of traders put stops (5 points for NQ is the same as 2 ES points, a classic). We will see if that number holds, but as you know this is precisely the kind of clue I look for. Note ER (recent darling) getting very close to its 50 dma (711).
The confirmation that the Feds will most likely not raise rates anytime soon has sparked a rush to bonds the past few days, draining equities. But the tide can turn very quickly and tomorrow's pre-open news will either confirm today's selling or confuse traders even more. Right now, I would respect the double bottom off July if it holds overnight.
NQ traders also note that NSM reports before the open. Last quarter, they put out a solid forecast. The stock is at multi-month lows with 2 to 1 puts over calls at the 20 strike.
This entry was posted
on Thursday, September 04, 2008 at 9/04/2008 08:35:00 PM.
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