NASDAQ Market Commentary for Friday Sept. 28, 2001
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In the 15 minute chart: Wave b of the correction extended. As you can see in the chart below, the index extended quite a bit further to the downside and then at mid day it rallied up in an impulsive move ( blue channel) towards the end of the day. The sharp extension down broke the critical level of 1455, though it was the only index to do so and suggests a great deal of weakness within this index compared to the other two. At this point, the upside does not look complete, though at least wave 1 of this rally is done. A break of the lower blue channel line near 1458 could signal at least a minor retrace with next support near the 1418 low. A move below this may put further rise into question with next support below near 1408 and then 1385. There is strong resistance above near 1465, 1480, and then 1517 and 1530. Stochastics are entering overbought which suggests limited upside for the morning and could possibly lead to a minor pullback, perhaps as part of a correction to the small blue channel rise.
On the hourly chart: One can see the larger corrective structure following the break of the falling blue channel.
Above this pattern is a series of resistance lines that will be difficult to get through from 1530 to 1670. A move
above 1530 could lead to next resistance at 1570, 1605, 1620, and then 1670. A move below 1418 should start
leading the index back down with support levels at 1408 and 1385. Stochastics are entering overbought which
suggests that upside may be limited, but if this is the C wave of an a-b-c correction, then it just might remain
overbought for a little bit. Only a move below 1418 will question further rise. If the C wave scenario is true though,
and if C is roughly equal to A, then we could have a potential upside target of about 1565 for the next day or 2,
though a 0.618 wave is also possible for a target of about 1508.
On the daily chart: The index is in a very strong 3rd wave down that began near the 1836 highs. Within this
decline, it appears that this portion of the decline is now over as the candlestick cluster circled in blue suggests a
reversal pattern. The entire series which began near 2100 is a wave 3 pattern of which waves 1, 2 and 3 are now
complete, and wave 4 of 3 appears to be unfolding. Stochastics are rising from oversold which favors the upside.
There is strong resistance near 1530, and then 1620 as well as a gap fill point near 1640. There is strong support
near 1450 and then 1385.
On the weekly chart: New extended chart! It appears that the favored scenario outlined many months ago of the
decline being incomplete is now the more accurate assessment with the index now appearing to be in wave 5 of the
decline off the highs. Only a move above the upper line of the blue down channel near 2000 is a bullish buy signal.
Within wave 5 down of this higher degree, waves 1 and 2 appear to be complete with wave 3 down now forming.
Next major support areas lying near 1275 and then 1100. Stochastics are oversold which suggests that downside
may be limited, though elliot wave suggests much lower and within a major bear market down wave, this indicator
remain in oversold for some time.
For Friday, my best guess is that there might be some initial pullback followed by a continued rally higher with
resistance above near 1465, 1480, 1517, 1530, and then 1570. However, be aware of a pullback that falls below
1418 as that could negate any further rally and begin to take the index lower with support near 1408 and then
1385. The one unknown factor in tomorrow`s trading will be the revised GDP number. At this point, I expect it to be
revised negative which might have a negative impact on the markets, but a surprise to the upside may give it extra
strength. Gaps one way or the other will affect the probably outcome according to the charts.
Good luck!
14.30 Uhr und 16.00 Uhr werde ich heute am Drücker sitzen, mal sehen wie die Amis mit dem Spiegelbild ihres Niederganges fertig werden
sYr
