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Chart of the Week:
NASDAQ 100
April 22, 2002


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Our professional trader had some successes and some losses over the past month, but still came out on top! He has our volume indicators to thank for having made over $20,000 in the last month!

Security Return
Options (NDX April) 76%
Options (NDX May)    20%


Once again the NASDAQ 100 tested it's major support level, which was set near the end of February. Only this time the volume was quite pronounced, as it rose quickly to a very high level. This volume is quite significant when you add up each individual surge. You can see from the chart below that there were 4 large volume surges as the index was going down, and each of these surges was more than 1.5 million!

All of the above trades were placed using simple volume analysis techniques, where when volume goes up while the index is going down, buy once the volume peaks. Likewise, when the index is going up and volume goes up, sell when volume has peaked. When you look at the above trades, you can see they are all substantiated with a moderate to large increase in volume, and all trades occurred once the volume has peaked.

As I explained, the volume that we see on this chart is quite a significant indicator that the NASDAQ 100 has reached it's support level. It is even more significant because all of the volume surges which occurred between April 9th and April 12th were as the index was declining.

Generally we would tell our users that now is a good time to go long on the NASDAQ 100 index, but there is some room for doubt as there was a moderate amount of volume on April 15th as the market we moving up. We estimate that this volume covers about 30% of the volume that we saw on the index's way down. Since this volume occurred as the index was increasing, we have reason to think that the NASDAQ 100 index will once again re-check it's support level.

Don't expect to see the NASDAQ 100 go through it's support level of about 1,300 unless there is a large increase in volume where the 1-day VMA for the NASDAQ 100 exceeds about 2 million and the index is moving up. It this situation occurs, we suggest that our customers close their long positions, but not to begin shorting unless there is no significant volume increases as the index moves down.

We don't think the NASDAQ 100 breaching it's support level is very likely, but we want our customers to know what signals to look for that indicate this will happen. Otherwise, we expect to see the NASDAQ 100 continue moving up, if not after having re-checked it's support level.

 


Based on MarketVolume's analysis, our professional investor was able to make the following returns:

Security Return
Options (NDX April) 76%
Options (NDX May)    20%

We welcome any questions or comments from our customers regarding this chart of the week.


To see more details about the motivations behind the above trades and trade details, sign up for a Free Trial today (no credit card information will be collected) by clicking on the following link:

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2002
Date Indicator
December 30, 2002 NASDAQ 100
December 19, 2002 S&P 500 (SPX)
December 10, 2002 NASDAQ 100 Index
November 27, 2002 NASDAQ 100
November 20, 2002 NASDAQ 100 (NDX)
November 13, 2002 NASDAQ 100
November 6, 2002 S&P 500 (SPX)
November 1, 2002 NDX
October 25, 2002 S&P 500 (SPX)
September 25, 2002 NASDAQ 100
September 18, 2002 SPX
September 6, 2002 S&P 500 (SPX)
August 21 2002 NASDAQ 100 (NDX)
August 14 2002 S&P 500 (SPX)
August 7, 2002 S&P 500 (SPX)
July 31, 2002 NDX
July 24, 2002 NASDAQ 100 (NDX)
July 17, 2002 NASDAQ 100 (QQQQ)
July 10, 2002 S&P 500 (SPX)
June 26, 2002 QQQQ
June 14, 2002 S&P 500
June 12, 2002 QQQQ
June 5, 2002 S&P 500 Trading
May 31, 2002 S&P 500
May 29, 2002 NASDAQ 100 (QQQQ)
May 22, 2002 QQQQ
May 17, 2002 S&P 500
May 15, 2002 QQQQ
May 8, 2002 S&P 500 (SPX)
May 3, 2002 NASDAQ 100
May 1, 2002 NASDAQ 100 (QQQQ)
April 28, 2002 NASDAQ 100 index
April 22, 20022 NASDAQ 100
April 3, 2002 S&P 500
February 25, 2002 S&P 500
February 8, 2002 NDX
January 30, 2002 NASDAQ 100

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