Technical Analysis On The NASDAQ

Out of the 3 major indices, the NASDAQ has been the strongest but as you can see in the above chart the NASDAQ is clearly weakening.

Notice the double top that has taken place at the 200 day moving average. This is the same formation that took place in the Dow Jones Industrials a few weeks ago right before the dow collapsed. A double top formation is a reversal pattern which means the uptrend has now turned into a downtrend.

Even the trendline has been broken which gives us additional confirmation that the trend has reversed from up to down.

Notice how today's high coincided with the low between the double top formation. In other words, support as turned into resistance.

As far as I am concerned, the trend is down. What isn't clear is how long it will last and far down stocks will go. I am short and trailing my protective stop to lock in profits.