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Nasdaq Notes



A few notes on the recent Nasdaq pattern:

  • The Nasdaq futures finished lower for the sixth consecutive day. Since the inception of ND futures in 1996, there have been just three prior occurrences. The next day (6/5/97, 11/14/00, and 4/30/02) ended higher each time.

  • Each day this week, the ND100 ended below the prior day's range. The futures finished the next day higher in of 11 of 13 occurrences after four consecutive closes that were below the prior day's low.

  • To capture the dynamics of Monday's reversal and subsequent decline, I then qualified the four day ago high was at least a 15 day high with four consecutive lower closes. Again, the results were quite bullish for the next day with 5 of 6 closing higher.

Past performance does not indicate future results but the above notes highlight how far the rubber band has been stretched. If Snapper is to arrive on the scene, the best "tell" may come from the action after the first hour. The six day decline featured one common characteristic: early intraday highs (illustrated below). A new intraday high after the first hour would be a change in character worth noting (for the short-term that is).

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