One More Hurdle in the Nasdaq 100
- Posted by Greg Harmon
- on January 6th, 2017
The Nasdaq 100 closed within a fraction of an all-time high Thursday and the ETF that tracks it did make a new all-time high. The saying goes new highs beget new highs, so all should be rosy right? Yes that is the case. But there is one last hurdle for the Nasdaq to clear. Not a 14 foot American ninja Warrior warped wall, but a hurdle nonetheless.
The chart below shows the price action in the Nasdaq 100 ETF ($QQQ) since the end of October. That is when it went through a bearish harmonic Bat pattern. It was the one index that did not rocket higher following the election. The price retraced 61.8% of the Bat before reversing higher to a new all-time high December 13th. And it has consolidated from there. It has made three higher highs, by pennies, but has clearly shown resistance at about 121.10 for a month.
What could be the key to a prolonged run higher is the 3 day pullback into the end of the year. This came back to the 50 day SMA, reset the RSI and MACD lower in the bullish ranges, and started a squeeze in the Bollinger Bands®. Since the calendar turned to 2017 the price has moved higher and will start Friday just below that 121.10 with momentum surging. A push through would give a target to about 123 on a Measured Move, not a major move but a good break out to start.
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Gregory W. Harmon CMT, CFA, has traded since 1986 and held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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