Tech, Shrek. The green monster still looks sick and so should soon turn red...
Nice recovery ... at least on the surface. Who could have predicted it?!
Under the covers, though, NASDAQ's rise is a wee thin on advancing issue participation. This after reversing a steep decline in March '09 with no sign whatsoever of building underlying strength indicating an important bottom possessing staying power being put in place (like happened in March '03) ... and this after months on end during which time tech, generally, was being drained.
Tech still is being drained. Now, however, is time when dumb money is drawn in. Clearly, the composite of issues trading on NASDAQ remain under pressure. A return to the NASDAQ Composite's Cumulative Advance-Decline "death spiral" trend but awaits initiation of $COMPQ's descent to levels last seen in 1987...
Sometime early-August was the last time I noted that, NASDAQ 2200 was by no means out of the question. Above was one reason why this ballpark objective appeared reasonable. A couple former support lines (now resistance) are converging here.
Now, about the present position of the monthly NASDAQ Composite's RSI. This reads the bounce off March '09 bottom is just about done, I would say.
And if you return to the first chart above ($COMPQ) and key on MACD (bottom panel), consider the present momentum trend in relation to the same noted last year. Before the lug nuts came off the stock market last autumn (2008), momentum likewise had been fading ... much as has been the case for many months now. Hmmm.
The point is ... once the market rolls over things could turn ugly extraordinarily fast.
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