Tuesday, December 26, 2006

Domed House in Nasdaq 100 Index

Here is a daily chart of the cash Nasdaq 100 index. This index is tracked by an ETF, the Nasdaq 100 Trust, series 1 (symbol: QQQQ). The QQQQ's currently trade at 43.01, just a shade under 2.5% of the cash index which currently stands at 1750.14 (2.5% of which would equal 43.75).

As you know I have been tracking the development of a George Lindsay Domed House formation in the Dow. My last post on this subject can be found here.

I thought I would take a look at the Nasdaq 100 for another point of view on this Domed House. In fact it is developing quite similarly to the Domed House in the Dow industrials. The one obvious difference is that the "five reversals" portion of the Domed House, points 15-20 on the chart, is assuming the more standard, flattened shape in the Nasdaq 100 than in the Dow industrials.

I think the Nasdaq 100 is about to establish point its point 18 low, although I could make an argument that it is in fact point 20 instead. In either case the prognosis is the same: a continuing rally, probably until the end of March. I expect point 23 in the Nasdaq 100 to develop near 1920 and the corresponding high in the QQQQ's to occur in the 47-48 range.


Paul said...


Can point 20 go lower than points 16, or 18? Actually can point 20 decline to 1700 NDX without violating the formation?

trlrdr said...

Great!-thanks for the NDX100 info!

Anonymous said...

Hello,the nasdaq up and the dow jones down ufff.I am believe that the stockmarket can have strong down in 2007 january-october for that 4-20 cycle years.The domed house i am see very longuer time 1999-2006 in the dow jones is very dangerous.

Regards,you blogg is very good.

Anonymous said...

nice thought regarding the
nasdaq 100 . i have been wrestling with the 1887 to 1924 taret range
for a while now . please update
that chart from time to time .
i find the 50 dollar level on the qqqq also interesting since this is the ipo price .

Anonymous said...

Just hit the 50th month of the 4 year cycle.

Only 3 cases since 1893 that stocks have made new highs past the 49th month in the 4-year cycle so this is the 4th.

source: Ray Merriman

Anonymous said...

I think point 20 actually is point 18. Further, Considering the recent actions in NDX, don't you think we are about to establish point 23 now? Compared to dec05 - jan06 we only need to go a little bit higher (till 1850-1860) and we should be the same percentage above 15,17 and 19 as we were in Jan06 before 23 was reached. What do you think?