The Nasdaq Breaks Through Resistance

On Monday we noted that the Nasdaq was running into resistance at the 10 day MA and 50 day MA.

We concluded that the Nasdaq needed to break above the resistance from these moving averages in order for this daily cycle advance to gain traction. The Nasdaq delivered bullish follow through on Thursday.

The Nasdaq backtested the day 41 low on Wednesday, forming a double bottom. On Thursday, the Nasdaq broke above the 10 day MA to close above the 50 day MA. This caused the 10 day MA to begin to flatten out so we will label day 41 as the DCL. The Nasdaq may still need to consolidate in order for the 10 day MA to flatten out some more before it can turn higher. You will notice that back in April the Nasdaq needed another 10 days after initially closing above the 50 day MA before the rally gained any traction.

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