A Weekly and Monthly Look at the NASDAQ finds Resistance

Sep 11, 2009: 5:12 PM CST

Let’s take a look at the current long-term Monthly and Weekly structure of the NASDAQ index to note key levels of overhead resistance which, if broken, will open clear skies ahead for price.

(Click on chart for full-view)

I’ve drawn two dominant Fibonacci grids starting with the March 2009 lows backwards to two swing highs (the top in October, 2007 and also the swing top in May 2008).

We’re looking at the grids which show the retracement percentage price has traveled upwards off the current low (as a percentage of the prior swing as drawn).

What we see is a key Fibonacci confluence at the 2,060 level of the 50% retracement of the full Bear Market; and a 61.8% retracement of the May 2008 swing high.

It’s rare to have two levels of Fibonacci retracement grids converge at the same price, and can often stop markets dead in their tracks… but like all things, there are no guarantees in any form of market analysis.

Barring the 2,060 level resistance, we have possible monthly major resistance zones to overcome:

(Click for full-size image)

Using the same logic, we see the 2007 Bear Market Fibonacci Grid as compared with a larger, “True” Bear Market grid from the 2000 price highs.

We see ANOTHER Fibonacci confluence – that of the weaker 23.60% retracement (less used) along with the 50% of the previously mentioned 2,060 level.

In addition, we see the Monthly 50 period EMA coming in at 2,090 which gives an expected resistance level that’s beyond Fibonacci.

Will it hold?  The fierceness of the bulls begs to differ, but for now – and until it breaks – let’s see the 2,060 to 2,090 zone as a possible inflection point down.

A close above NASDAQ level 2,100 would clear away all this resistance and give us clear skies in the index… but let’s see if bears are able to defend these potentially major resistance levels.

Please check out our premium subscription services (Weekly “Intermarket” Reports along with Daily Idealized Trades Reports) at the Premium Section of Afraid to Trade.

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter:  http://twitter.com/afraidtotrade


2 Responses to “A Weekly and Monthly Look at the NASDAQ finds Resistance”

  1. Aly_Somani Says:

    Excellent post, Corey

  2. Aly_Somani Says:

    Excellent post, Corey