A good deal of the rally in major equity indexes since this summer appears to have been led by the NASDAQ. Recently that index broke through the top of sideways range pattern but it has had difficulty generating follow through. Yesterday's dip closed right on the top of that range (1824 on NASDAQ 100) so the picture is a bit cloudy this morning, but a close through that level today would constitute a false breakout.
Such a close would be a signal that the markets are headed back into the range and will be more susceptible to selling pressure. Of course if the index closes above that range again an adoption of a short-term bearish bias would be on hold. The last couple sessions in MAR S&P have been stalling a bit at the December high at 1444.
While it's somewhat positive that the contract is seeing persistent trade against there, failure to get through there by Friday's close would be more damage to the pattern of higher highs and higher lows that had dominated the move since the summer lows.
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