NDX100 update

The NDX is technically the posterboy as it defended perfectely the neckline and turned upside again. We only have a little conflicting situation for the wave count as the low can only be the low of wave 3 down and we need to make wave 5 down as I had layed out in earlier posts. The wave of wave 1 down is 2320 and that is the max tolerance which is the 55 MA and matches also the line of dropping highs so far. Since the right shoulder has a time frame 0f 3 months the most likely outpıut would be another test of the ‘neckline’ as a wave 5 count followed by a bigger rally towards 2350 area. Since the monthly chart will close on the lowest level in 5 months tomorrow the monthly MACD iş about to generate a sell signal most likely in August but could even happen already by July. The short term oversold situation is now turned to  neutral and early July we can expect trouble with the bailout 2.0 package from the EU as all current ideas for the restructuring are valued as a technical default by the rating agencies which would cause some severe troubles in the financial system which gives us the fundamental background for wave 5 down besides all the world being on fire. For now window dressing dominates the action driven by short covering. Next week should be a dwon week though or the playbook needs to be changed in terms of short term swings.

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~ by behindthematrix on June 29, 2011.

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