Will 50 Percent Fibonacci Level Mark Nasdaq Inflection Point?

By Sheldon McIntyre
In 2012 we were reminded of the magnitude of the NASDAQ Composite decline during the 2000-2002 bear market. In March 2012 the index rallied to the 50 percent retracement level of the foresaid bear market before falling into a correction. In September 2012 and October 2012 the index revisited the 50 percent retracement, but failed again to hold this key technical level, thus highlighting the potential for a Nasdaq inflection point.

Heading into 2013 I see three clear options for the NASDAQ Composite:

1. The index could finally push above the 50 percent retracement of the 2000-2002 bear market and the 1983 trend line.
2. The index could confirm a Double Top and Nasdaq inflection point by trading below 2726.68 (the June 2012 low). This would set up the potential for a decline to the 1978 trend line where it found support in 2010 and 2011.
3. Lastly, it could trade sideways with a slight downward bias, also confirmation of a Nasdaq inflection point.

This article originally appeared on investing and economics site, See It Market | www.seeitmarket.com.

Twitter: @hertcapital and @seeitmarket

No position in any of the securities mentioned at the time of publication.

Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of his employer or any other person or entity.