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At 11:49 AM 4/6/2001 -0600, Earl Adamy wrote:
>... general conclusion is that the trend remains down and we should get some
>kind of a rally. The higher secondary low in the S&P is encouraging however
>the lower low in the NASDAQ is not.
Earl - actually I look at the marginal new low on the ND/NQ as being a
positive, as any move back up above the swing low causes those went short
at the swing low to cover if a move goes against them in any significant
manner. Its exactly this kind of "fuel" that often causes a test of bottom
to hold.
Given the big gap up, some folks became fuel.
Nasdaq futures:
http://www.ottographs.com/charts/2001-04/06/MW-11.gif
S&P futures:
http://www.ottographs.com/charts/2001-04/06/MW-12.gif
Given the huge move up on Thursday, and the prevailing sentiment, it
doesn't seem that surprising that some sell sellers came out to lock in
gains. And certainly there will be those that seek to establish new short
positions in anticipation of a fast clunk and test of recent lows. But we
should note that this did not materialize... at least not yet.
1. In both markets pictured, an argument can be made that old resistance
was providing support today.
2. The development of a declining wedge on the SP and a triangle with a
little trap on the ND adds a little more weight to the "its not dead, yet"
argument.
But I'm not dogmatic about such things, failure to move up could occur. If
what appears to be support now - intraday - fails, its likely that the
recent swing lows will be setup for a significant test.
So to round off the analysis, my gut says up too. But my trigger finger
knows no bias, so next week we'll see which way it leans!
Have a good weekend everyone,
IntelligentSpeculator.com
Michael Watkins
watkins@xxxxxxxxxxxxxxxxxxxxxxxxx
http://www.intelligentspeculator.com
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