Chart of the Week:
NASDAQ 100 April 22, 2002
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!
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:
We welcome any questions or comments from our customers regarding this chart of the week.
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January 30, 2002