NASDAQ APPROACHING IMPORTANT TEST
NEARING TEST OF EARLY 2002 PEAK... The Nasdaq Composite Index is approaching an important chart test. That's because it's nearing the peak hit at the start of 2002 at 2098. I've been using that as a major upside target for most of the past year. What the Nasdaq does there will tell us a lot about its strength -- and that of the rest of the market. The 14-week RSI line shows that the Nasdaq is moving back into overbought territory above 70. That doesn't mean the Nasdaq can't keep climbing, but it is a potential caution sign. The Nasdaq has been trying to reassert the market leadership it lost during the last two months of the old year. That would be good for the market since it usually does better when the Nasdaq is leading it higher. If 2098 is exceeded, the next upside target would be 2328. We're watching this test of the early 2002 peak very closely.
Chart 1
