it was ALL THE WAY back in Feb 2015 that I did a post on the upcoming resistance of the NASDAQ and then the breakout to new highs … did it for Andy @seeitmarket here: http://www.seeitmarket.com/nasdaq-trend-line-converging-with-2000-high-breakout-14142/
in that post I wrote:
“let’s remember that this is a 40+ year chart, so setting up that move could take some time.”
one could argue it took almost 20 months …sheesh. anyway, let’s take a look at some “stuff”
how “strong” is the NASDAQ? Do a ratio analysis quick look:
what are we doing here:
- make a ratio: NASDAQ / DJIA
- IF chart going HIGHER THEN the NASDAQ is stronger than the DJIA
- IF chart going LOWER THEN the NASDAQ is weaker than the DJIA
- NOTE, we’ve been slowly and steadily stronger than the DJIA (chart doesn’t lie) but NOTE there has been no BIG move, yet.
- Stair Steps UP (where no swing low is broken) are powerful indicators of an underlying trend ….this trend is strong in a relative strength sense…
- folks, again, IT TOOK 14 YEARS for the NASDAQ relative strength to retrace .382 percent of the 2000 blow off tech top. Slow and steady move higher …
- HERE’S the KEY …note the RSI. the support transition that has occurred tells you that the market has possibly shifted into a much more bullish mode and is one that should be noted and taken seriously! frankly, we might be on the verge of a big parabolic move like 2000 … g
- PATTERNS work ….note the blue shaded areas, those are “likely” targets for this move … could it go to new all time highs? Yes, the RATIO could do that but, for now, let’s pay attention to the breakout about to occur at the .382 (red line)
the chart above is a “long term” LOG chart of the NASDAQ from it’s all time low …
- note the two red trend lines. the lower trend line is pretty powerful and price is just clinging to it …with this breakout to a new high I believe the NASDAQ has, at a minimum 10% move coming into the 6100-6200 level.
- also – NOTE the FRACTAL on the RSI. It certainly appears to be doing the “exact” same move ..
- a high, a couple bumps and then a dump into a low and then a move higher to build negative divergence.
6100-6200 represents THE AB=CD from the all time low and a 1.27 extension from the 2000 high … as a pattern recognition expert – this SHOULD BE SIGNIFICANT RESISTANCE.