Nasdaq 100 Loses February PMO BUY Signal

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The Nasdaq 100 had managed to avoid a Price Momentum Oscillator (PMO) SELL signal while the other major indexes on the DecisionPoint Scoreboard did not. Of course, their PMO SELL signals only lasted a week as whipsaw PMO BUY signals arrived shortly thereafter. The NDX's previous BUY signal had remained intact since February.

Looking at the daily chart for the NDX, we see that overhead resistance at intermediate-term tops from 2015 held strong. This PMO SELL signal is arriving in overbought territory so the likelihood that it will stick is high. 

The NDX did not enjoy the same kind of rally the other indexes did this past week. You can see the differences on the index charts below. Note that their PMO SELL signals arrived earlier last week. Consequently, there will be some lag before they switch to their own PMO SELL signals. And yes, I do believe those SELL signals will arrive. Note all of the PMOs have topped and are very close to their signal lines. All of these indexes pulled back below overhead resistance.

Before I leave you, I want you to see the monthly chart for the NDX. It has managed to hold on to the long-term rising trend channel. Based on the declining monthly PMO and its top below its signal line in late 2015, I wouldn't expect to see a breakout to new all-time highs. 

Conclusion: The NDX did not rally to the same degree as the Scoreboard indexes this past week. Its failed attempt at moving above overhead resistance is troubling. This PMO SELL signal arrived in overbought territory and consequently it is more viable than a SELL signal in neutral or oversold territory. I suspect that the NDX will be leading the way lower for all. 

Come check out the DecisionPoint Report with Erin Heim on Wednesdays and Fridays at 7:00p EST, a fast-paced 30-minute review of the current markets mid-week and week-end. The archives and registration links are on the Homepage under “What’s New”.

Technical Analysis is a windsock, not a crystal ball.

Happy Charting!
- Erin

Erin Swenlin
About the author: is a co-founder of the website along with her father, Carl Swenlin. She launched the DecisionPoint daily blog in 2009 alongside Carl and now serves as a consulting technical analyst and blog contributor at Erin is an active Member of the CMT Association. She holds a Master's degree in Information Resource Management from the Air Force Institute of Technology as well as a Bachelor's degree in Mathematics from the University of Southern California. Learn More
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