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.