The daily chart would logically project to the 50 day moving averages if the bounce continues and gains strength  because in a down trend that is a notable ‘if’.
The weekly chart agrees that 3600 is the target with the broken trend channel and lateral resistance.
The US stock market is negative pre-open, but don’t be surprised if we get a strong bounce soon. It could be a trade-able bounce. I have bought a couple items in anticipation and am watching several more.
A bounce is a bounce; a trade. It is what happens on a would-be bounce that will be important going forward. What will the market do at resistance? That will tell us a lot about what this thus far mini correction will be, another quickie or something more lasting.
SPX has firm support at around 1800.
One of the leaders, NDX needs to bottom shortly and make a ‘higher low’ to February or it is going to activate a bearish intermediate signal.
The Nasdaq 100 index needs to find support as noted on the chart or the switch is going to flip back to bearish… like, quickly.
Well, actually we used the Nasdaq 100 chart, but I can’t pass up the opportunity to make a cute post title. Last week we asked if the similar setup in the NDX (and hence, the QQQ as well) would manifest in a similar outcome (in this case, bullish). We may be getting our answer as NDX powers above the 50 day averages.
The Nasdaq 100 is at a similar bounce point to early February. That is as far as this post will go. You tell me if it will follow a similar course.
Guest Post by Tom McClellan
March 07, 2014