Saturday, September 09, 2006

NASDAQ Technical Picture - Low Volume NR Trade

Friday's low volume trading was NR and choppy. Although all of the major tech sectors posted gains on the day, it was a stock pickers market overall. The NASDAQ was unable to close above the 10 day EMA and until that happens we can assume a stance of near-term weakness as volume tracks higher on bearish days and lower on bullish days.

The chart below highlights the 50% retracement from the May highs to the July lows. After a significant retracement of this kind, it is normal to expect a pullback as we have seen this week. I continue to favor consolidation and possibly further pullback to the bullish gap support in the 2125 area.

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