On the left hand, the NDX hourly chart dropped to the point where the bailout rally started just the upper part of the gap and it might hold here for today. Since it gives the opportunity of being counted as a corrective wave of the upmove, which I doubt it is. At this level, it's a 50% retracement of the upside crash, which was nothing but short covering. In any case, there are two ways to unfold wave 5 down. The likely one is a 5 wave count and this might be the wave 1 down count and a wave 2 up will bring us to the levels I mentioned earlier (the volume today is fairly low compared to the last days), back to 1000 SPX and 1400NDX - since we have quite some big option volumes to settle this Friday. If the gap holds for another hour, we might trade higher for the rest of today.
Wednesday, October 15, 2008
NDX technical update
On the left hand, the NDX hourly chart dropped to the point where the bailout rally started just the upper part of the gap and it might hold here for today. Since it gives the opportunity of being counted as a corrective wave of the upmove, which I doubt it is. At this level, it's a 50% retracement of the upside crash, which was nothing but short covering. In any case, there are two ways to unfold wave 5 down. The likely one is a 5 wave count and this might be the wave 1 down count and a wave 2 up will bring us to the levels I mentioned earlier (the volume today is fairly low compared to the last days), back to 1000 SPX and 1400NDX - since we have quite some big option volumes to settle this Friday. If the gap holds for another hour, we might trade higher for the rest of today.
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