Sunday, September 17, 2006

NASDAQ Technical Picture - Short-term Over Extended

The NASDAQ is over extended short-term as indicated by Friday's black candlestick. The black candle forms when we gap up and close lower than the open. This is usually a signal that the market is exhausted and needs to consolidate or pullback. Last week the NASDAQ gained 5.6% on five successive days higher. The slope of last week's action is very steep and cannot be sustained.

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