THE DOT - if this turns orange or red be alert

Monday, March 7, 2011

NDX update

Basically we are repeating exactly the same consolidation in those ovals and the low was so far just to the previous one again. The overall picture is a bit different though as we had close by already a consolidation this could become rather a Head & Shoulder with the support line being the neckline but we need to break below the 2308 support to have a good indication that the neckline will be challenged and even broken. Otherwise we might just turn upside again but with the latest development that Obama is considering a military option the odds are we test the neckline this week as a war is not priced in yet. Although it will not be a fullscale operation anyway as Iraq or Afghanistan. The target of that H&S would be 130 points below down to the 2170 area. The second test of the 55 day MA is another difference to the earlier consolidation and shows implied weakness of the market. Within 24h we will have a good clue how to go from here - astrology also rather hints to an imminent escalation.

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