NDX has remained near its biyearly Pivot Point (computed with logarithmic data) since the middle of may. Today the market tested this level (12,282) for the first time since June 9th. The movement of the market around the PP will provide useful clues about the near term direction of the market. If the market moves back below the PP in the next couple days, this would signal continued bearishness. On the other hand, if the market holds above the PP over the next several days, this could suggest a more sustained rally.
Right now I am leaning more toward the bearish scenario. The market met some stiff resistance today (Jul 20th) at around 12,500, so it is possible the market will drop below the PP (12,282) as early as tomorrow. I will post a more detailed analysis once the direction of the market becomes more clear.
**Note**
The Pivots Point in question was computed using the formula ( log(PrevHigh) + log(PrevLow) + log(PrevClose) ) / 3. It is necessary to use logarithmic price data to compute pivot points on timescales longer than monthly.
Right now I am leaning more toward the bearish scenario. The market met some stiff resistance today (Jul 20th) at around 12,500, so it is possible the market will drop below the PP (12,282) as early as tomorrow. I will post a more detailed analysis once the direction of the market becomes more clear.
**Note**
The Pivots Point in question was computed using the formula ( log(PrevHigh) + log(PrevLow) + log(PrevClose) ) / 3. It is necessary to use logarithmic price data to compute pivot points on timescales longer than monthly.