Nasdaq Composite - Low Retest May Not Come Next Week

The best outcome for the bulls is to see the January 2008 low tested next week(in February), which is a good reason why I think it is not likely because that sets up a bullish spring on lighter volume. I have highlighted the March 2006 candle here. March 2006 was the last month of extreme volume prior to August 2007. In January, the Nasdaq destroyed all the lows from 8/2007, 3/2007, as well as 3/2006. When this test comes in March, it will be on strong volume and if history is any measure, stronger than January. I posted yesterday that if you want to be short in a bear market, you must make the bear case prove itself each and every day - or be subject to emotionally-charged bear spikes like the one we saw yesterday - as hope "springs" eternal. The true and final bear outcome will squash all hope and the spikes will subside as the charts start to look like an ocean bottom, when investors finally "get it" that there is no recovery in the cards. We're a long way from that here. The key here is breaking under 2200, that's almost certainly going to result in a test of the round number 2000 support.

Edited by SemiBizz, 23 February 2008 - 01:03 PM.

The weakest RUT on Friday was the strongest sector off the bottom, had the most stocks coming out of bullish divergences, and many stocks reached overbought. Bullish divergence like in financial and homebuilders did work, but ultimately these stocks exhaust and fail. There is almost no meaning to bullish divergence, many dont even get the pop. We'll see who gets the next rotation down.

I'd love to see them gap this up tomorrow. Then we'll just see if they can spike it up and hold it up, because that's the key... if we just see sharp peaks on these charts, that's going to be the telltale. I'm not believing any of this BS until I see those prices go up and STICK... like for at least an hour. Lately it's been peak and puke on one 3 min candle.

Edited by SemiBizz, 24 February 2008 - 07:05 PM.