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One way to analyze the NASDAQ performance is to keep tabs on the percentage of stocks above the 50 day moving average and watch for divergences. We have a minor positive divergence happening now, but what is even more encouraging is the length of time we’ve spent under the 20 value. Yes we popped up above the line, but that was extremely short lived.

Three months seems to be a fair amount of time before a serious rebound rally has occurred when looking over the past five years. Using that as a good NASDAQ performance gauge, it’s likely a tradable rally could happen anytime in the next 2 weeks. When you add in my market timing indicators being extremely oversold it seems like a good trade to scale into some longs now.

ndx

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