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NASDAQ 100 Futures Outlook
Monday, April 10, 2006

Pre-Market Update - NQ

On this pre market update I want to cover the Nasdaq 100. I believe we need to begin focusing on the nasdaq 100. NQ is the only Index that has lagged and has not broken out to new 52 week highs this year. The reason that NQ has lagged is because there have not been enough buyers and because the chips have not gone up enough. Nevertheless, I believe NQ is the only index that anyone should be paying any attention to. The fact is that the Nasdaq 100 actually led the recent rally to allow the other indices to make new highs in the first place. The NQ 100 rallied in the very beginning of January, from 1650 - 1774. Now the recent rally off of the February lows unfortunately took 10 times the amount of days that it did for the rally in January. The most recent bottom was placed around valentine's Day, at 1650, and NQ retraced up to 94% at 1774.

If sub wave 3 of this structure has been put in, the Nasdaq 100 will most like retrace back to the up trend line. If it is a fast correction it will hit the uptrend line quickly. In contrast, if it is a slow moving correction / sideways move we will have to wait for the up trend line to catch up with price. This is how corrections work; NQ either goes to the uptrend line or we wait for the up trend lines to catch up to price. You can see this by looking at the third chart.

The third chart shows the past year of Nasdaq futures. According to this structure, it took a year to for NQ move from wave 2 to 3 of the second largest wave. Wave 3 to 4 has only been 100 points. The bottom line is that nothing says that wave 3 is in. It most likely that NQ will trade sideways, and then put in an extension. Higher prices are ahead. The market will not go anywhere until NQ can take out the wall of resistance at 1774. The move upwards will not occur until the front runners such as: ADBE, AAPL, SNDK, & GOOG start moving up.

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