A clearly defined price trend channel has been shaping technology prices since the 2009 bottom. $NDX recently broke above the price channel
in an overshoot. Overthrow’s of the channel are common and can suggest prices have come too far. Couple that signal with the fact that $NDX rang new highs while its brother, $DJI did not.
The September correction merely brought NDX prices back to the top of the decade long channel. The rebound from the September low created a lower high.
This is poised to pop back inside the channel. If it does, it likely won’t be a little poke…it will likely drive to the mid-line of the channel and possibly to the support trend line of the price channel .
Bottom line, keep an eye on the channel and if prices pop back inside, then more losses and gnashing of teeth are likely to follow.