Monday, March 24, 2008

NASDAQ Update



Big day for the NASDAQ today as the Q's rallied almost 3.5%. I've been short this market based on the symmetrical triangle pattern and exited the trade this morning at a loss.

In the lower pain in the above chart is a ratio line of the NASDAQ vs the S&P. As you can see the ratio line has been rising since late February even though the NASDAQ has been moving lower. This was an indication to me that I might be on the wrong side of the market and that is why I tightened up my protective stop 11 days ago. Looking back I guess I should have just exited the trade when I saw the rising ratio line.

I'm not sure what to think right here so I will remain on the sidelines and just wait for some kind of setup to take place. Below is an interesting chart of the S&P with a potential double bottom formation.

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