Dow Jones and Nasdaq100
Money can't buy you happiness but it does bring you a more pleasant form of misery. ~ Spike Milligan
The Libyan turmoil and the Japanese weighed down on the U.S. stock markets but the media coverage made it obvious that a bounce/rally would emerge from an contrarian perspective.
Dow Jones Daily Chart
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The decline has virtually disappeared and now it's blatant that the markets want to move back towards the highs. However the obviousness of this should warrant for some caution as the downward sloping channel may produce a reversal.
Those looking for the long term top will have to appreciate the levels of 11600 as a marker for real downside activity to emerge. This trend line would need to snap for the downside to offer sort of seriousness.
If the top has been placed at around 12400 then price would need to start backing below 12000 in the coming days so that it can stay within a downward sloping channel.
The Nasdaq must lead the way for any convictional activity and this is why looking at the NDX offers importance to assess the overall directional play.
The Nasdaq100 Daily Chart
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It is possible that the index has topped at 2400 but for this we would need confirmation and the best confirmation of all would be to snap base line at 2188. Over the coming weeks we will be looking to see if this index has already marked out the danger signs in which perhaps the Dow Jones and S&P500 may hit new highs for the year but this index may perhaps start to lag.
The uncertainty is high and volatility is increasing but no real confirmations have been produced from the sell side as the trends have not been broken.
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