Thursday, October 23, 2008

NASDAQ Technical Picture - Test of October Lows

Yesterday we talked about the bearish pennant pattern taking shape. The one caveat we were concerned about was volume, which had not declined appreciably throughout the pennant formation. Today the pennant was breached intraday and the October lows were tested, but a high volume reversal ensued. What we have at the end of the day is a head fake and a bullish long lower shadow on the doji/hammer-like daily stick. Lets see if we get any follow through tomorrow.

The USD appears to be weakening at these lofty levels. A retracement in the $USD would be good for gold. ABX and AEM are my personal favorite gold stocks and I will be watching them for long setups in the coming days.

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