Analysis was created by Marcus Muehlbauer MD PhD aka “Ben Bernanke at www.tradesignalonline.com”

NDX 100: Against all odds!

Dear investors,

I told my clients since months that the 2200 and 2000 area are really important. A big inverse shoulder head shoulder (SHS) pattern was in place as long as 2000 (or better 2200) were being defended. And so far every time we hit the 2200 area the long term bulls came back. Because they know what an inverse SHS pattern means for the markets. We knew from the last 2 weekly candles that something was up. And the bullish candle formation was confirmed with this weeks candle. Moreover we closed above the mid Bollinger. A slap in the face of all bears! And the slow stoch just started to turn to the upside!I also said since May that we were about to build a big bullish wedge exactly below the major resistance (high from 2007). In addition we even had a false break to the downside which was actually pretty good because it destroyed investors confidence (see AAII). But interestingly the 200-day moving average was in that area. And in case of a bull market it had to give some stabilization. Moreovers when you have a false break to one side, you will then consequently break out to the other side. That's why they call it "false" break.
And this is what happened this week. Look how viciously the markets rose after the significant reentry in the bullish wedge on 6/20!Conclusion:

Because of the above mentioned facts I do not see any reason for mid term investors to sell right now. I expect that we break above 2400 in the NDX 100 and the highs from 2007 in the NDX Comp. A first target would be the 2500-2600 area. We would have to analyze again once we reach the target area. As a support I only see the 2250 area and of course the recent low at 2180. But we have the mid Bollinger, 200-day moving average and the 62% retracement around 2250. Therefore a break of that region would already be really bearish.

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Have a great July

Marcus Muehlbauer MD PhD