Nasdaq Heading Back to Pre-Crash?

I continue to think Dow and S&P are heading to their respective 61.8% Fibonacci retracement area between 2007 October market top and 2009 March market bottom (Dow around 11,260, S&P around 1228) and have been sitting on my long positions.

And guess what. I totally missed the tech rally. I kept thinking, for example, AAPL (Apple Inc.) was a buy when it dropped to $190 in January. $190 was a support for several months. Didn't do anything. I still thought it was a buy at $217 (breakout point), and most recently at $228. I still think it is a buy on a pullback, but haven't done anything about it because I haven't been following Nasdaq as I used to and don't have a good feel for the index.

Nasdaq, after January swoon along with Dow and S&P which many traders and investors took as a sign of imminent severe downturn in the market, recovered and went past 61.8% retracement line around 2250 (that's where the index turned back down in January) and now seems to be on its way to 100% full retracement.



On 10 year chart, Nasdaq seems to be at a "Make or Break" place. The index is currently hitting the upper trendline from 2000 high. It is at a logical place to turn back down again. An ultra-slow slow stochastics (133) shows Nasdaq as an index has been a dead money for the past 10 years. Even now, it has barely emerged from oversold condition, with MACD finally coming back to zero.

We shall see. I think I will start watching Naz again and see how it behaves from here. And I'm hoping AAPL will pull back after iPad launch...

Major Indices In Between The Lines

The stock market is holding OK, pretty good actually, considering the unemployment rate in May came in at 9.4%, highest since 1983. (For more, you can read my other blog post.)

(Except... they are slamming the gold and silver stocks AGAIN!!)

So, between the "green shooters" and realists (you could say "doom and gloomers"), where does the market stand right now?

The answer: IN BETWEEN.

Here are the weekly charts of Dow Jones Industrial Average, S&P 500, and Nasdaq, with only Fibonacci Retracement lines drawn between the week of September 22, 2008 and the March 09 low. Dow and S&P this week are right in between the 38.% retracement line and 50% retracement line.

Nasdaq has been outperforming the other two in this whole run from the low, and that shows in the chart, too. Instead of in between the same Fib lines as the other two indices, Nasdaq is in between the 50% retracement line and 61.8% retracement line.

For Nasdaq, the next potential Fibonacci line resistance could be the 50% retracement line from the Oct-Nov 07 top to March 09 bottom, around 2,000.

Analysts and traders are saying now is the "make or break" time for the market. But then, haven't they been saying that for at least 2 months?