NASDAQ Technical Picture - Rounded Top Followed by Lower High Signals Weakness

Despite Monday's swoon and Friday's early selloff, we are still holding the multi-month trendline on a closing basis. Friday's mid-afternoon rally felt like it was more than just short covering going in to the weekend. For the time being we can ascertain that we have formed a bearish rounded top (note that the rounded tops on both the INDU and S&P are much more prominent that the NAZ), followed last week, by a lower high. Volume on bearish days is only slightly higher than on bullish days. So we await a breach of the trendline on a closing basis in order to confirm that a correction is in play.

Personally, I would like to see a test of the rising 50MA after this multi-wave uptrend, followed by a Christmas rally to higher highs ;-)