As I have been pointing out in previous articles, the downside Nasdaq 100 eminis (aka noodles) target at 1658 has finally been hit on the daily inverse pup breakdowns as the Nasdaq tests that 2200 level. The daily 50-period moving average resistance now sits at 1677 levels. This should be the extent of any bounces and good spots to short into. We are breaking down going into January 2006. The tough part of this market will be getting the time frames squared away. The dailies can down a downtrend but you need the participation of the 8/13/60 minute charts to get the full impact of the downside moves. Converging time frames are the key here going into the new year.





Look for bounce attempts off the weekly 15 period ma support on the QQQQs at 40.20 which is around 1650 on the noodles. Look to short into the the daily 50-period moving averages near 1677 for an eventual test of the monthly 5-period moving averages at 39.80 and 1633 levels.

Good trading gang and Happy New Year, looking forward to some real volume in January and peak earnings season.

Jea Yu

Jea Yu has been involved with the equities markets for over 10-years. He specializes with intraday trading in the U.S. equities and futures markets. To receive a free 7 day trial to Jea Yu's Underground Trading Pit, click here or call 888.484.8220, ext. 1.