If you have been watching the NASDAQ Composite Index for the last few weeks, it is likely that you have paid close attention the area around 2315-2320.
I usually don’t talk about basic support and resistance levels in the major indices, largely because guys like TraderMike and a host of others cover those bases nicely. Given all the interest associated with whether the market has bottomed or will bottom soon, I chose to focus on 2320 in The Game Is Afoot back on January 25th. With three weeks of hindsight, this has turned out to be an even more critical level than I had expected it would be.
In the chart below, which shows 60 minute bars over the course of the past month, the 2315-2320 area has defined two important gaps and repeated instances of critical support and resistance. If today’s rally continues, it is possible that this level will not be tested going forward; however, if it does get tested again, expect the battle for 2315 to be one of the most important skirmishes that will determine whether the lows of January 22nd and 23rd turn out to be a bottom.