Stock Market Trends - NASDAQ Charts
The NASDAQ rally continues though volume is falling. The rising trend also offers support. The market remains overbought at this stage, though we could see the rally continue for a few more days. With earnings season beginning in earnest next week, we might see a pullback to consolidate the recent gains before analysts digest the early earnings reports.
RSI is above 50, indicating an uptrend, though it has reached a high level. The MACD is at a high level and poised to turn down through its 9-day moving average. If it does, it will be a sell sign. The Slow Stochastic is above 80, where it will eventually turn down.
The break out is a positive sign for the markets. Since the indicators are at high points, we are more likely to see a pullback, possibly to the break-out level or the rising trend.
On the 60-minute chart, we see the rebound off the rising trend indicating the market is continuing to rally.
The RSI is above 50, a sign of an uptrend. The MACD turned back up through the 9-hour moving average at the level, a buy sign. The Slow Stochastic rebounded back up through 80, negating the earlier sell sign.
The hourly NASDAQ chart tells us the market remains in rally mode for now. As long as the rising trend remains as support, the rally will continue.
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The market usually performs best when the NASDAQ leads the S&P 500, as the smaller entrepreneurial companies outperform the larger, more established companies. Also, the NASDAQ tends to have more technology companies, which influence its direction. Should the S&P 500 outperform the NASDAQ, then we likely see a move to more quality companies as they tend to weather a downturn better. The chart below displays this ratio of the NASDAQ over the S&P 500 along with major buy and sell signals. The NASDAQ is on the top of the chart for reference.
The ratio rebounded up from the signal line (20-day moving average), reaching a new three-year high. This indicates the NASDAQ is performing better than the S&P, a positive for the technology sector.
The MACD is trending sideways as it has for all of 2010. The RSI remains above level 50, a sign of strength.
This indicator is telling us the NASDAQ is leading the market up, though it is at a high level where the probability of it turning down is higher.
You can link to the current version of the chart with the link below.
COMPQ/SPX Ratio
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