Is The Relief Rally Done?

 | Oct 06, 2014 06:53AM ET

The easy work for bulls is done, now the real graft begins if overhead supply is to be consumed. A couple of indices sit at resistance levels more suited to short positions, but shorts haven't had too many opportunities beyond the recent 'bull traps'.

The NASDAQ is perhaps the most vulnerable. It tagged former support turned resistance with the 50-day MA just overhead.  Another leg down to test 4,325 would appear more likely, although a strong start on Monday would put a short position on hold.


If bulls make a bright start today (and futures are looking good), then the resistance levels for the NASDAQ S&P and NASDAQ 100 (to a lesser degree) could be breached quite early. It would then be important for these levels to hold for the day, and certainly finish with a close above them. Any fade out during the day or late afternoon would give shorts an advantage into Tuesday.

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Declan Fallon

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