Lazy Summer Trading - 082508

The NASDAQ gave us our higher high candlestick on Friday, taking it right back to the 200 day moving average were it closed. A problem with the buy signal is that it came on volume of only 1.3 billion shares traded. That’s the lightest of the year for the NASDAQ, and signifies end of summer trading.

Trading is difficult here. The NASDAQ rallied off a double bottom just below 2200. It still sits below its long-term trendline, which comes in around 2430. I’ve posted a weekly chart of the NASDAQ, where it’s easier to see this trendline.

I’m thinking that Friday’s rally could be a fake out, and the NASDAQ could be headed back down to first support of 2300. A break below the daily pivot of 2360 would probably do it. I expect some chop here in the 2400 range first though, and will be trading light again this week because of it.

The oil sector finally had a decent bounce last week, as the oil holdrs - OIH finally broke above its resistance line. Friday’s low could be a fake out.. The 20 day moving average held, and I’ll be watching that for support. Oil sector stocks will doubtfully see the highs again, but reaching that 50 day moving average, is definitely possible.