Now that the new year is finally here, we can really get down to business and see what this market is made of. It seems like we have been melting up slowly on no volume for years as is the case with holiday trading. I thought it would be a good idea to take a graphical look at where we are now. Let’s start with the S&P 500.
The bulls are still in control here as the market is in a firm uptrend, but the bears (if there are any left) can point to the fact that there was no additional headway made by the bulls in the last few weeks of 2010. That is not much to hang their hat on, but without at least some hope, all bears will die in the wilderness. The bulls have to love that upward sloping 50-day moving average, which will act as strong support should the market pullback in the near future.
The NASDAQ as judged by its ETF QQQQ looks a little more troublesome for me compared to the S&P 500. It is also in an uptrend, but notice the end of the chart and the “rounded top” formation, which is slightly bearish. This is especially true since volume on the downside has ticked a bit higher. Again, this isn’t a terrible chart, but it is much weaker than the S&P 500. The 50-day moving average at 53.34 will provide some support, but if that is violated, there isn’t much more support until the 49 area.
The easy gains for the bulls have been made during the holiday season and we will now see what they are made of. A lot of traders will be back from vacation and volume will pick up dramatically. As I mentioned, the bulls are still in control so one must continue to respect the uptrend, but I think the NASDAQ is vulnerable to the downside should that initial support area fail. We will continue to monitor the technical picture of the market thoughout the year.
Getting Tecnical: A Graphical Look At Where We Stand is an article from: 
