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SPX, NDX, INDU: Did Bulls Drop the Ball on Friday?


It's too early to say for certain, but here are the key near-term levels.


As I mentioned last week, a number of markets appeared to be running at cross currents. Nasdaq 100 (INDEXNASDAQ:NDX) is one such market, and has been much weaker than INDU and SPX (chart below).

Bears should be aware of the fact that if NDX has completed a five-wave structure at red degree, it may have formed a long-term top... or it may only be entering a second-wave decline, to be followed by an explosive rally. We'll have to see how the structure develops from here.

Click to enlarge

The big picture SPX chart shows one possibility that appears reasonably likely at the moment -- again, watch the key levels outlined in the first 3-minute chart to help determine if new highs are coming more directly. The blue path shown below comes into play only if those key levels are broken by the bears.

Click to enlarge
No positions in stocks mentioned.
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