Technical Analysis. Nasdaq 100,

For the last several weeks we have been saying that the market is in an uptrend, that the market will be going up. If you watch the S&P 500 index you can see the major support volume of the past few weeks.

This week's chart is an excellent example of the support level for the S&P 500 index. As most people have been aware, the market has not yet changed it's general direction and seems to be heading further down. The NASDAQ 100 especially seems to have no regards for the support levels of more traditional indexes such as the NYSE, S&P 500 and Russell 1000. We can expect that the NASDAQ 100 index will change direction when the other indexes do, but in true NASDAQ style, it will go up faster than the other indexes.

Here we have an example of the S&P 500 index back in September. The volume associated with the index's reversal on September 24 is about 3 million (1-day moving average, volume averaging). This volume began around the 19th (see point A), and the index did not go up until the 24th. We believe that what occurred here is similar to what is occurring now.

In the chart blow we can see a similar behavior to the situation we saw above. There is a large amount of supporting volume (points B and C), which is around 3.5 million (1-day moving average, volume averaging). The S&P 500, NYSE, and Russell 1000 indexes all have been bouncing around the support level shown here.

We believe that the index will go up, but as was the case in September, the reaction to the huge support volume will be delayed just as was the case in September. The fact that we have a large volume today (point D) only lends further volume to the support level. We see it as a confirmation of points B and C, indicating to us that the index is near a reversal point, as it has to react on these huge volumes.

We suggest that all our subscribers pay close attention to index behavior and volume levels in the coming days as an index reversal is imminent, it it has not already begun to happen. But remember, the index could bounce up and down off of this support for a while longer.

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