NDX has been in a tight trading range for almost 2 weeks 1130 - 1200. Its a kind of right shoulder pattern and we will likely go up to 1250 before testing the 1130 support again. If that turns out to develop as suggested the break below the 1130 neckline will trigger follow through selling to 1000 once again. That scenario is the basic script as the SPX and DOW even have to make new lows in Q1. So far 25% of the SPX have reported and earnings are down by 51% without financials down 10%. Thereby financials are always early in the agenda of reporting and the earnings momentum will decrease going forward as the job cut momentum is just picking up and consumption which accounts for 70% of the US economy will be shrinking sharply and hopefully the Obama admin will force a more faithful reporting standard as the current one inflates earnings anyway by 10-15%.
Monday, January 26, 2009
NDX tech update -Tech outperforming since Jupiter ,n Aquarius
NDX has been in a tight trading range for almost 2 weeks 1130 - 1200. Its a kind of right shoulder pattern and we will likely go up to 1250 before testing the 1130 support again. If that turns out to develop as suggested the break below the 1130 neckline will trigger follow through selling to 1000 once again. That scenario is the basic script as the SPX and DOW even have to make new lows in Q1. So far 25% of the SPX have reported and earnings are down by 51% without financials down 10%. Thereby financials are always early in the agenda of reporting and the earnings momentum will decrease going forward as the job cut momentum is just picking up and consumption which accounts for 70% of the US economy will be shrinking sharply and hopefully the Obama admin will force a more faithful reporting standard as the current one inflates earnings anyway by 10-15%.
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