Written by Rich B. Meier
TopEquityNews.com
The technical take this week is straightforward. In the past year, four times, the NASDAQ has experienced bullish MACD crossovers with the indicator below zero. The buy signal has been very kind to its followers as the index charged higher in a hurry, every single time. In fact, the smallest gain was 4.5% and the largest move 10%; all taking place within three to six weeks on a nearly 45-degree angle up.
On Friday, we got number five. For MACD to keep its perfect 2011 record, Europe, now with an assist from the Federal Reserve, is going to have to continue taking steps to resolve their debt problems.
Economic news on the home-front is getting healthier. In the past month or so, we have had a series of better than expected results. Unfortunately, until last week, the uptick has been hidden in the wake of rising Italian, Belgian, French, Greek, German… interest rates. As fear of default grows, so do yields.
The politicos, especially in France and Germany, appear to understand the gravity of situation. Top Equity News expects them to continue saying the right things. And what they say this week will be especially important as no major economic reports are scheduled for the week ahead.
If Wall Street can get off to a quick start, or keep losses small, momentum should continue to build and help MACD get one for the thumb.
Last week, TEN offered up ProShares Ultra QQQ (QLD) as a way to play a reversal of oversold conditions. While it wouldn’t be too surprising to see the NASDAQ give back some gains to 2600’s neighborhood; however, if form holds, QLD could be in for another 5% to 12% move – fingers crossed. On the downside, make sure you put in a stop to protect gains in the event traders turn negative.
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