Nasdaq Monthly Support 012208

The Nasdaq bounced off the 50 ma on the monthly chart after opening down 119 points. That moving average and trendline support is 22% off the October high. I traded QLD for the bounce, and watched the market trade flat with a few scalps the rest of the day.

GS is trading inside a large channel on the daily chart. It’s still one of my tells for the health of this market. We’ll need trade above that 200 area, and the trendline, before the market can even think about heading higher.

Today’s sustained bounce may have been nothing more than the unwinding of options trades. The next few days should help determine if we’re getting close to a bottom.