This is going to be resistance test number five for the Nasdaq100. We’ve been watching the area in the high 50s for an entire year now. Two Months ago I mentioned that I felt the Large-cap, Tech-heavy Index was setting up for a Monster Breakout. Once again, these levels are coming into play:
I don’t think this one is really that complicated. We have a fixed level of resistance where the bears have outnumbered the bulls in every test going back a year. We have a series of higher lows that takes us back to the end of the summer which shows us that the bulls have been getting more and more anxious with each decline.
The More Times that a Level is Tested, the Higher the Likelihood That it Breaks
Let’s be a little bit conservative with our numbers and call the important lows near $54 for $QQQ and highs around $59. The measured move on a breakout should then take us a touch above $5.00 to somewhere in the mid-$60s..
The action in the components will be essential here. $AAPL and $GOOG each made new highs yesterday before reversing lower. For the Nasdaq to do its thing, you want to see breakouts hold in those kind of names.
Stay tuned, because I think it’s only a matter of time before we see fresh 11-year highs for the Nasdaq100