ajtj99's Market Pulse

[ajtj99]

Important NDX monthly chart.

I posted this chart earlier this month, and it looks like things may turn out bullish for the NDX going forward.

The rising resistance out of the Jan. 2004 and Jan. 2006 highs is in play at about 2020, so it's possible we close below that line tomorrow. The main falling resistance out of the all-time highs through the 2239 Oct. highs is around 2090 NDX next month, so that's an important area to watch.

If we look at the stochs on the monthly chart there are some patterns in play that are quite bullish.

1. The 14,3,3 full stochs have a bullish compression pattern that is resolving up. They are currently at 41 and should resolve up to the 95 area.

2. The slow stochs 45,17 are turning up from the 50 level after being above the 80 level. This is the most bullish stoch move possible. This has never happened on the NDX before to such a degree. Probably the closest example would be 1994 on the SPX. That resolved extremely bullish. 1998 on the RUT is another example. Price doubled off the lows in that example.

3. There is a "mirror" pattern on the NDX that matches the early 2001 time period. That pattern suggests the NDX will move up to 2800-2900 this year, which would match up with around 3600 Nasdaq. That would be also about 1750 SPX.

4. The action we are seeing out of the lows is close to what we saw out of the lows in March 2003. The monthly candles are even looking the same. That pattern would have a doji candle in the month of June, up in July and August, down in Sept., and up the rest of the year.

Interesting times. This is not the outcome I expected, but it is strongly suggested by the monthly chart patterns on the NDX right now if we close in this area tomorrow.