The Nasdaq Composite would still remain in a bullish stance if it can hold 2757 support both today and on the last trading day of the week tomorrow 2/10/2011. The Nasdaq appears to be currently doing a classic Wyckoff Retest of the break out area.
The market has continued to play with peoples minds in that it continues to slowly trickle up showing only the occasional decline which usually reverses by end of day. It is simply a persistent uptrend, nothing more. As long as the markets continue to do breakouts and then Wyckoff Retests that behave normally, there is no reason to panic or expect market collapse.
On the other hand if we start to see failed retests and 2B sell signals then it could warn that the rally is starting to lose steam.
On every retest there is always this ‘moment of truth’ where the bulls and the bears and the supply and the demand must battle it out to make a determination whether there exists valid support or not.
I talked previously about the 2007 all time highs in the nasdaq composite and that it represents a supply range. My current theory is that we could push above it first before we really get a true downward reaction to that supply range. So I was thinking 2860 or slightly higher before a true supply reaction comes in.
But there always exists the possibility that the market will react to this supply much sooner. If that is to be the case then the current Wyckoff retest setup would fail and we would see it fall below 2757 either tomorrow or next week.