JUN. ‘14 Nasdaq 100:
The Nasdaq has had an impressive run up over the past two weeks; however, price is now approaching previous highs on the chart, which could temporarily suspend near-term bullish momentum. The area around 3734.75 will likely provide significant resistance to price action as the market attempts to push through this level and print new all-time highs. Furthermore, the recent highs have failed to produce relatively high readings in the relative strength index (RSI) aka bearish divergence.
This certainly doesn’t mean that the market has to correct, but a rejection from resistance confirmed by a bearish divergence signal could serve as confirmation of a potential short-term counter-trend opportunity in the Nasdaq. Look for the 3714.25 level as well as yesterday’s lows to provide support to the market, with additional longer term support coming into play around the 3658.50 – 3669.50 area. Both intermediate and near-term momentums appear to favor a bullish argument; however, given the technical landscape of this market, there are valid trading opportunities on either side of the market today.
Nasdaq 100 30-minute Bar Chart (e-Signal)
About the Author
Erik Tatje is currently a market strategist at RJO Futures and is the author of The Tatje Report, a daily technical correspondence. He has been an affiliate member of the Market Technicians Association since 2011 and has passed all three levels of the Chartered Market Technician (CMT) program. Erik can be reached atetatje@rjofutures.com or 312.373.5176. Learn more at www.rjofutures.com.
