By: Rich B. Meier
With few scheduled economic news reports, and with many on Wall Street away from their desks, the week ahead looks to be quiet one, especially volume wise.
The lack of presence means whatever happens this week is sort of a mirage. It’s there, but can be undone in a flash when everybody returns geared up and in full-effect come 2012.
From Top Equity’s technical perspective, we are a little worried that stocks could have a lid on them. The NASDAQ is trading at two potential resistance points, its 50-day-moving-average and the top of a descending trend-line that connects recent lower highs.
The trend-line has been a reliable profit taking point since the end of October. However, the picture is muddled just a little below as we also have an ascending trend-line that connects a series of higher lows, typically a buy signal. The NASDAQ is definitely on a collision course.
The two lines look like they are going to meet right around 2575ish. This is good or bad news. When these sideways triangle patterns come to a point, whichever way they go next tends to be BIG.
NASDAQ Technical Analysis 12-27-11
With the combination of a major market move ahead and a light week of trading on tap between holidays, TEN would advise you to be real cautious until the triangle pattern is complete. When it comes to a point, Wall Street’s computers won’t wait long to tell us what to do next.
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