In light of the big Apple downturn, the NASDAQ is getting smacked.
Miller Tabak technical analyst Jonathan Krinsky declares that the NASDAQ 100 is about to see its big test.
Looking at the Nasdaq 100 futures, however, we can see that despite the decline of over 1% as of 7:30 am, they are still holding above a key area of support just above 2700. Interestingly, after the index made a Death Cross in December, it is now about to form a Golden Cross, where the 50 DMA moves above the 200 DMA. We know that moving averages, by definition, are lagging data. As such, while Golden Crosses can be quite bullish, we don’t want to put too much emphasis on that point. The bigger issue is whether the market is able to absorb this first potential hit of 2013. Holding above 2700 would likely be viewed as a victory for the Bulls today. Meanwhile, S&P futures have mainly ignored the AAPL weakness, with the ESH3 down just 0.20% as of 7:30 am. Even a pull-back to 1475, however, would be well within the confines of a bullish consolidation. Should we see selling pressure build beneath 1470, then a change of character may be upon us.
Here’s a chart of NASDAQ 100 futures, with a line at 2700 where the “test” is.