Nasdaq ready to MOVE

[Bill Bancroft <bbancroft@xxxxxxxxx>]

I trade using a mechanical model, and that model has me out of the
market right now due to high interest rates and poor breadth.  Having
said that, I have attached a weekly chart of the Nasdaq that contradicts
that outlook.

First, the price has broken out of a trading range to new highs.
Second, momentum has broken out of a triangle and is heading higher
(assuming the market closes the week where it is at right now--big
assumption).
Finally, and perhaps most importantly, the weekly ADX is at a very low
level reflecting the recent trading range.  The ADX indicates the amount
of trendiness in a market, it does not indicate direction.  The low ADX
is saying that the market is ready to trend.  Considering the first two
points I made, the direction of that trend looks to be UP.  If the
Nasdaq can not stay above the recent trading range, that would be a
signal that the market may be ready to trend DOWN.  Either way, the the
point is, this market is ready to MOVE.

If one didn't want to try to call the direction of the market, one could
buy a straddle---a put and call of the same strike price.

Bill Bancroft

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