Today is April 12, 2006

Our current signal is BUY

This signal was initiated after the close on June 27, 2005

We believe that the stock market is toward the end, if not at the end, of a short-term pullback. Even though some of the indices have broken key support levels, this only suggests that there may be more consolidation ahead of another breakout, as opposed to the long-term uptrend being over. Tonight we have charts of the S&P 500, NASDAQ 100, Russell 2000, and NASDAQ Composite.

You can see from the first chart that the S&P 500 did break its uptrend line and has since broken to the downside from its small rectangle pattern. Classical technical analysis would tell you to measure the height of the rectangle to know how far the index will fall. By doing this we can see that the fall is just about over, if not already. Support is in the 1280 area.

The second chart is of the NASDAQ 100. You can notice how the index recently broke above its right shoulder and this would suggest that the head and shoulder pattern is invalid. Currently, the index is sitting on top of its recent ascending triangle breakout. Support is in the uptrend line drawn on the chart and the horizontal line from the recent breakout.

The third chart is of the Russell 2000. You can see how the index fell perfectly to its lower uptrend line yesterday. We believe that this powerful support will continue to push the index higher. We do not foresee a break of this level.

The final chart is of the NASDAQ Composite. The index has broke below the recent breakout area, but we still believe that support will be found at the two horizontal lines indicated on the chart.

Even though some uptrend lines and horizontal support areas have been broken, we believe that the market is just consolidating in an environment with little volatility. In time, we believe the indices will continue their long-term uptrend.

Take Care,

Stephen Brown
Founder of Nasdaq Wizard, LLC