I do not disagree that we could have some op-ex unwinding on Monday or Tuesday. However, there are a few things that are compelling me to look higher:
A. Triple Top on COMP - I've already discussed this. B. NDX/COMP Top Divergences - I've already discussed this. C. COMP Daily chart turned up this week. Distributive tops are not in until full stochs (14,3) turn down from above the 80 level. They are currently at 71 and could go to 95 before turning back down. RSI 14 is currently headed towards a double top near 70.
D. The COMP closed above the 200 EMA at 1409, as it has done at the Jan 2002 and Dec. 2002 tops. If we back test that MA and hold above that, we're going to take out 1430 COMP IMO. E. Weekly COMP chart is still pointing up. The RSI is in a rising channel and is above 50.
In addition, look at how we've got a near bullish engulfing candle on the weekly chart. You can't ignore that. It's fairly unique in this bear market. In the harami position, it's bullish with any follow through.
F. Volume has been rising on the daily.
G. Max Pain on the QQQ is 26.50 for May (1063 NDX).
Sure, there are a ton of topping indicators right now, but if we focus on the simple things going on - price moving up, volume decent, resistance being breached, and full stochastics still rising and not overbought, we can make a case for higher prices in the near term.
If we do get such a rise, it could be sufficient to create buyers exhaustion (and remorse <G>), allowing a downdraft to take out the underlying support that has been propping the market up.
Disclosure: I'm currently short, and will look to cover on a pullback. If we break 1430 COMP, I'm long for a possible blow-off. I may be long even earlier than that.
I suspect we will turn down decisively by Tuesday.. The real question though is whether this would be just a correction before a final run to 1500 or the beginning of a big smash.
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