Option Investor
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NASDAQ-100 stalls, with markets unchanged

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I wouldn't say today's trade has been range-bound, but the first half of the session was definitely a choppy trade when "rumors" of U.N. weapons inspectors supposedly leaving Iraq were squashed, when President Bush's Rose Garden speech, which lasted roughly 2- minutes, was focused on Palestine/Israel road to peace.

When President Bush began his speech, the major indexes rallied from fractionally negative territory to session highs, with the Dow Industrials (INDU) jumping to 7,931, but now hold just a 23- point gain, while holding above the 7,800 level.

Bulls haven't really been able to get the more-tech-heavy NASDAQ- 100 Index (NDX.X) 1,024 -0.51% to "overly bullish" gains today, but there's a level that keeps showing up at 1,018 that warrants a trader's attention.

With somewhat of a mixed trade ahead of a weekend, I've tended to not put on any trades today, but have been reviewing some things from past pivot matrix data. The last couple of weeks, I've felt the NASDAQ-100 Index (NDX.X) would show first sign of strength, if it was able to break much above the 1,018 level, which was this WEEK's R1 level of resistance. Yesterday, the NASDAQ-100 surged through that level like it wasn't there, plus broke a long-term downward trend on its bar chart.

NASDAQ-100 Index Chart - Daily Interval

While the 1,018 level was a level that has been showing up in the WEEKLY and MONTHLY pivot analysis levels, it is also a level of interest when it comes to "conventional" retracement in the NASDAQ-100 chart, when retracement is taken from the October lows to December highs. If there's one "major" index that looks to have found a bottom in October, it would certainly be the NASDAQ- 100 Index at this point.

I've turned more "bullish" on the NASDAQ-100 with yesterday's impressive move higher, but I'm just not a "full position" bull at this point. However, I will be monitoring the 1,018 level near-term as a level of support, from which I certainly would oppose a 1/4 bullish position in call options, but would SERIOUSLY only consider options with expirations that extends at least 3-months.

The NASDAQ-100 Tracking Stock (AMEX:QQQ) $24.60, is perhaps the most "favored" security by which trader's and investors seek exposure to the NASDAQ-100 list of stocks. A pullback entry point that I'm starting to warm up to would be the $24.70 level, and look for firm support at $25.25 upon entry.

One thing mentioned in this morning's market monitor, is that according to Dorsey/Wright and Associates sector bullish % list, the Semiconductor Sector Bullish % (BPSEMI) reversed up into "bull alert" status yesterday at 28% bullish, after having fallen to 22%.

Jeff Bailey

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