NDX Levels (Pre-Google Earnings)

The NDX got a MAJOR boost in the arm after market closed today with Google earnings coming in very favorably to the market. Google closed up $76.42 to $25.96 (17%) in after hours trading. NDX futures shot up and are holding at 1875 at the time of this posting.

The Internet Index ($DJUSNS) will be interesting to watch as it may get some strength to set about testing the 38.2% fib level up at 420. This will likely require Google to lead the charge.



The Software Index (DJUSSW) is at resistance, but will likely break through on Friday with the Google strength. (riding the internet coat tails)



The SemiConductor Index ($SOX) got some needed strength with the Intel earnings news earlier this weak, but still sits below some overhead resistance at 380. Like the others, we'll see if Google can lead them up and over the 380 level.



The Biotech Index Sector ($BTK) has shown some incredible relative strength and may give us some clues chartwise on how the other sectors might play out once they break out above resistance. Notice that once resistance was broken it didn't take long to retest the downward trendline. Now we watch over the next few weeks to see if it can break and hold above the downward trendline. If so it would be good news for the NDX.



The key to any sustained rally will be the need for some more good news! The market has a VERY short term memory, and by next Wednesday everyone will have likely forgotten about Google earnings and will be looking for the next bit of news to confirm their bullish stance. If bad news spooks the market they'll sell and we'll have to wait for more good news to drive it back up.

If more companies can beat expectations it should keep the market moving up.

This is the same chart we looked at 2 weeks ago when we talked about the importance of the 1860 and 1825 level. Notice that we closed in the dead center of that range today. It took some trips out of that range over the last 2 weeks (forming a bull flag) and tomorrow it will likely open in the 1860-1875 range. The next fib target to the upside is 38.2% - 1886.08

We'll be watching carefully to see if Google can save the day "all day" by staying positive for the entire day and closing above 1860 again.

An 1890 close would create a higher high for the NDX.

NDX Daily Chart: