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A Crucial Hurdle for the NASDAQ - True Edge Trading

A Crucial Hurdle for the NASDAQ

Of all of the major broad market indexes, the NASDAQ has without a doubt been the most bullish. It’s the only index that has exceeded its 62% Fibonacci Retracement level as of today. It even posted the largest percentage gain in today’s session. But there is a major NASDAQ level that we need to watch closely in the upcoming sessions as it could pose a crucial hurdle to future gains.

Stubborn Resistance for the NASDAQ at 9000.

On Thursday, April 30th the NASDAQ opened at 9005 and closed the session at 9000 – it basically went nowhere. While this isn’t earth-shattering news, in the current market of high volatility it can at least be said that it wasn’t expected. But should it have been?

The 9000 level on the NASDAQ proved to be a high pivot in early March. This means that it could represent potential resistance if tested again. But 9000 also provided short term support in late January. So that gives us three touches in 2020 of this nice, round number where we saw a reaction by the index.

The NASDAQ closed today at about 8834. That’s within 180 points of our crucial 9000 level. The current Average True Range for the NASDAQ is 264. This means that 9000 could easily be back in play as soon as Tuesday.

Whether you are trading intraday of after hours, keep an eye on 9000 in the coming days. A break of the level should bring significant buying pressure into the broad market. However, if this level is honored once again as resistance, the bears should come in strong and we should be prepared for substantial selling pressure.

Jeff Drake
True Edge Trading