Index Strat Risk Target DJIA [B]Flat[/B] NASDAQ [B]Flat[/B] S&P500 [B]Flat
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To review: “The decline from the October 2007 high is in 5 waves, therefore a multi-month countertrend 3 wave advance is underway. Fibonacci resistance does not begin until 8736.” The short term pattern has cleared up a bit. Wave B within an A-B-C corrective advance from 6470 may be underway now towards 7080-7280. This process could take at least a month.
The Dow finally broke above resistance at 8,089 the 61.8% Fibo level of the 9,088 – 6,470 decline. Therefore, we may see a test of 8,315 the February 9th high today with 8,500 as the next resistance level.
The S&P count is the same as the Dow count. A B wave decline is most likely underway towards 740-764.
The S&P 500 broke above resistance at 875 but fell back below the price level to end the day yesterday. The level spears vulnerable and a move above it today could lead to an extended rally. However, if resistance holds then we could see a test of support at 835 over the next few days as range bound price action continues.
The Nasdaq is in the same position as the other US indexes. Expect a decline in wave B towards 1410-1458 over the next several weeks.
The Nasdaq has broken psychological resistance at 1,700 and is threatening the 38.2% Fibo level of 2,473 – 1,265 decline where we are also seeing the 200-Day SMA converge. The two major technical levels could set up the tech laden index for a retrace back to support at 1,600. However, a break above could lead to a test resistance at 1,785-the November 4th high.