The NASDAQ opened lower for the third straight session, but unlike the previous two days the bulls lacked the strength to lift prices beyond Tuesday's pivot point high. The weakness at the PP level, resulted in a reversal and a steady slide with only one attempt to regain another lost PP in mid-afternoon. It failed and the market swooned lower in the final 45 minutes, closing on its lows. All this profit taking was amid higher volume and judging by the daily timeframe above, it looks like the biggest one day decline since March. In the process we breached our trendline and closed two points below the 20 EMA.I'll be watching how price reacts to the pivot points plotted on the 15 minute timeframe above at key reversal times. I'll also be watching the PPI data at 8:30 and Business Inventories at 10:00.
Is this just normal profit taking or are we heading into a corrective phase? It's too soon to tell, but if we breach the next level pivots (green/red lines) on a closing basis, the bulls will be in trouble.
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