I’m seeing enough positive things in the Nasdaq that leads me to believe we’re going to move higher. How far exactly I can’t say, but my signals are now bullish and the ability of the markets to stay above the June highs is encouraging. Right now I’d say we have about 50 points of upside before we’ll be able to determine if this is going to move above that area of resistance.
Everybody is going to talk about the volume issue and I realize it is the elephant in the room, but this is the summer and volume is often lower. Add in the completely obvious head and shoulder pattern that is developing and it’s easy to be a bear now. The main problem with this angle is that the market never rewards the obvious.
If we break down from the little area of consolidation, all bets may be off. However we’re more likely to break out in the direction we’ve been moving over the last week. And if you want to stay out of this market, try the gold market as it just broke out and should be a good trade from here on out.
