The ValueLine Arithmetic Index (VLE) continues to be my favorite gauge of the market. Price bounced off the March low with a very steep slope and has begun moving back down to the 4×1 angle. I expect either the 4×1 angle from the March low or the 1×4 angle from the 2002 low to provide support. Of course, the bullish bounce would come at the 4×1. But the 1×4 angle is only about a 50% price retrace so that would not be bad at all. Note that the 1×1 descending angle down from the July 2007 high has been very strong resistance during the entire bear market.
The Nasdaq Composite (COMPQ) is my favorite index for judging the current market (the VLE works all the time). The move up from March has lasted 123 calendar days (126 starting on Monday). Price has corrected about 75% of the low when price first moved through the 1×1 angle. Usually, price will break through from the high side and then test (and fail) from the low side – as it did here. I find the point where price broke though is often a good level to watch for support if the subsequent correction is bullish in nature. The 1×2 angle here should provide a platform to move back up… if that is the intention on the market.
The linear square of 9 shows the Nasdaq 100 (NDX) closing in on 360 degrees from the recent high. This level provides a good test of the May lows and a possibly a launching point for the final 10-20% leg of the bull move off the March low.
The linear square of nine shows 837 on the SPX as a good place to bounce. I do not expect the SPX to move up in the last leg as much as the Nasdaq and the VLE.
Stock Charts with Some Fundamental Data
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Tags: Gann Emblem · Market Outlook · Nasdaq Charts (IXIC) · Square of 9 · Value Line Arithmetic Index (VLE)No Comments
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