Although there is plenty of downside here, there's no structural damage yet. We had a huge volume day on Wednesday that set the tone for today's revelations regarding MOT warning in the middle-of-the-night, the chip downgrades of INTC, BRCM, MRVL and associated collateral damage. Wednesday was a big volume day, and as usual - somebody always knows. They setup today's trading on Wednesday. The operators are sitting back from their well-defended positions setup in Wednesday's trading to see what the street does with it. And what is the number one indicator? Volume. Volume will tell us if this is just a dip or if the bulls are finally going to get thrown off the bus.We're expecting a test now of Wednesday's lows on Nasdaq (2394.66). If that low is breached on lighter volume then we'd expect a bounce, unless it closed under the previous trading range set on 11/27 (2405.89). Now if Nasdaq exceeds the volume of Wednesday and does not test the low, that is a stealth sign of strength.
TRADING STRATEGY QID.
1) If the futures market closes like it did on Wednesday we will close 1/2 of position as these get bought EVERY time.
2) If Nasdaq does not exceed the low or does not close under the previous trading range on lighter volume we will maintain present position with previously published stop of 51.25
3) If Nasdaq closes under the previous trading range low of 2405.89 we will add to our position on a bounce.
4) If Nasdaq exceeds Wednesday's low and volume, closes under it, then we will aggressively add.
Edited by SemiBizz, 05 January 2007 - 12:19 PM.