S&P 500 & Nasdaq Analysis and Trends

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NASDAQ Composite Index (COMP) Monthly Summary Analysis »» Forming Base
By: Marty Armstrong | February 2, 2019

Analysis for the Week of February 4, 2019

OUR ANALYTICAL VIEWPOINT AS OF THE CLOSE OF Fri. Feb. 1, 2019: NASDAQ Composite Index Cash closed today at 726387 and is trading up about 9.47% for the year from last year's closing of 663528. The historical perspective in the NASDAQ Composite Index Cash included a rally from 1974 moving into a major high for 2018, the market has pulled back for the last year. The last Yearly Reversal to be elected was a Bullish at the closed of 2016 which signaled the rally would continue into 2018. However, the market has been unable to exceed that level intraday since then.


This market still remains in a broader bullish posture warranting a classification as a Bull Market. Nonetheless, the Weekly level on the indicating models shows inherent weakness with signs of overhead resistance at this point in time. However, the last reversal to be elected on the Weekly level was a Bearish the week of December 17th. At the moment, this market has been rising for 9 years going into 2019 suggesting that this has been a bull market trend which has been confirmed by electing all of our model's long-term Bullish Reversals from the key low.

The historical major high took place here in 2018 and we have up to now this year remained trading within last year's range in a consolidating pattern. This market on the yearly level has been making new highs since the last low established 9 years ago which has been a series of successive advances. The last 4 highs have been progressively making higher highs implying we have had a bullish market in motion for the past 35 years. The last high was made during 2018. The magnitude of this advance suggest we are dealing with a Plateau Move rather than a mere Phase Transition. We have not elected any Bullish Reversals thus far.

Meanwhile, our technical resistance stands at 857235 and it will require a closing above this level to signal a breakout of the upside is unfolding. Nevertheless, our technical support lies at 565602 which is still holding at this time. At this moment, the market remains between these two projections leaving it neutral on a technical basis.

Looking at our timing models, it is possible to witness a turning point come March in NASDAQ Composite Index Cash. Therefore, remember to watch for this possible development at the time. The last cyclical event was a low established back during December 2018. Normally, this implies that the next turning point should be a reaction high. However, the market has been neutral for right now, so caution is advisable and look more closely at the short-term trading levels for a hint of the next directional move into that target time frame. Last month produced a neutral inside trading range from the previous month but closed on the positive side. Respectfully, we are still trading neutral within last month's trading range of 730312 to 645713. We need to breakout of this range to confirm the direction. Therefore, a close above will be bullish and a close below will warn of a possible decline.

Some caution is necessary since the last high 813330 was important given we did obtain two sell signals from that event established during August 2018. Critical support still underlies this market at 580514 and a break of that level on a monthly closing basis would warn of a further decline ahead becomes possible. Nevertheless, at this time, the market is still weak. Taking a broader view, this market is in a downward trend on all our indicators looking at the monthly level. Eyeing the direction of this trend, we had been moving down for 4 months. Subsequently, the market has consolidated for the past Monthly session. The previous high made during August 2018 on the Monthly level at 813330 remains significant technically and only exceeding that level on a closing basis would suggest a reversal in the immediate trend. The previous low of 619017 made during December 2018 on the Monthly level has held and only a break of 619017 on a closing basis would warn of a technical near-term change in trend. We have generated a sell signal, so some caution is required.

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