February 5, 2013

When there is pain in the market it is very useful to run the retracement levels on the market. We like to use the S&P 500 and NASDAQ 100. The S&P 500 is the market and the NASDAQ 100 takes into account tech stocks, especially the weakness in Apple.

The normal pullback after the move we have seen is the 38.2% retracement. We are not even close to these levels. The NASDAQ 100 is somewhat close. This morning we are gaining back most that was lost yesterday. Pay attention to these levels going forward.

Also, it should be noted that the NASDAQ 100 has a very high Choppiness score at 69 indicating a new move is on the horizon. We do not know if the move is higher or lower just that it is imminent. Low scores which are circled indidcate the trend is exhausted.

Many were in panic mode yesterday. Thanks to these tools we were not.