The Nasdaq 100 (^NDX) registered a small range spinning top pattern yesterday and is poised at a fairly critical level just above 1900 and in the neighborhood of a conjunction of all three moving averages.

Seen in the larger context of the almost one year of trading shown on the chart below is the essential range bound nature since the turn of 2008. Also evident is the relative indecision as the index seems to be in a tight envelope between the 38% retracement and the 62% retracement of the high and low during the period of the chart.

Unlike the chart we reviewed yesterday for the Russell 2000 where there is mounting evidence that the shorter term moving averages are ready to move above the 200-day EMA, the pattern here is less clear. On a longer term outlook for equities in the US one would want to see this index break through the previous highs from May and June, but these lie around 150 points above yesterday's close.



In yesterday's commentary I discussed a key area of resistance on the hourly charts around $1.49 for the euro as it attempts to regain ground lost recently against the dollar. Yesterday's intraday high was registered at $1.4903 and so far in European trading on Friday this level has not been exceeded.

Stepping back to a longer time frame analysis it can be seen that $1.53 would be a formidable hurdle for the currency as it not only coincides with a 50% retracement of the move down from $1.60 to recent lows around $1.46 but it would also encounter previous support levels in May and June that would now act as resistance.



The exchange traded fund UUP allows participation in a number of long contracts for the US dollar against other principal currencies. The chart suggests that in the near term a further retreat for the US currency may be on the cards but I would be looking to get long this fund as it comes back towards a retest of the mid August break out level near $23.20.



DUG provides a useful inverse trading vehicle for natural gas and crude oil as it moves down when the energy commodities gain ground and vice versa. The behavior over the last several months has been strongly trending and the breakdown of the upward trendline in the last few sessions is worth monitoring for signs that the trend has changed again.



Clive Corcoran is the publisher of TradeWithForm.com, which provides daily analysis and commentary on the US stock market. He specializes in market neutral investing and and is currently working on a book about the benefits of trading with long/short strategies, which is scheduled for publication later this year.

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